WESTERN SPARROW

WESTERN SPARROW

Income Tax Calculator for New Regime

Add Deductions
Income Tax: ₹0
How the calculator works ?

The Income Tax Calculator for the New Regime helps you estimate your tax liability based on your income and various deductions. Here’s a detailed explanation of how the calculator works:


Step-by-Step Process

  1. Input Total Income:

    • Enter your total income in the input field labeled “Total Income”. You can also use the income range slider to adjust your income value.

  2. Select Deductions:

    • Click on the “Deductions” link to open a modal window where you can select applicable deductions.
    • In the modal, you will find checkboxes for various deductions such as interest paid on rented property, contributions to the National Pension Scheme (NPS), voluntary retirement, gratuity, leave encashment, family pension, and more.
    • Select the deductions that apply to you and click the submit button to apply them.

  3. Calculate Tax:

    • The calculator automatically includes a standard deduction of ₹50,000.
    • Each selected deduction field has a specified limit. For example, voluntary retirement has a limit of ₹5,00,000, gratuity has a limit of ₹20,00,000, and leave encashment has a limit of ₹25,00,000.
    • The total deductions are subtracted from your income to get the net taxable income.

  4. Tax Calculation Based on Income Slabs:

    • The calculator applies the new regime tax slabs to the net taxable income:
      • Up to ₹3,00,000: No tax
      • ₹3,00,001 to ₹6,00,000: 5% tax
      • ₹6,00,001 to ₹9,00,000: 10% tax
      • ₹9,00,001 to ₹12,00,000: 15% tax
      • ₹12,00,001 to ₹15,00,000: 20% tax
      • Above ₹15,00,000: 30% tax

  5. Rebate Calculation:

    • If your net income is below ₹7,00,000, you are eligible for a rebate of up to ₹25,000.

  6. Cess Calculation:

    • A cess of 4% is added to the tax amount after applying the rebate.

  7. Display Final Tax:

    • The final tax amount, after considering all deductions, rebates, and cess, is displayed on the screen.

Example

Suppose you have a total income of ₹8,00,000 and select the following deductions:

  • Voluntary Retirement: ₹2,00,000
  • Gratuity: ₹5,00,000
  • Leave Encashment: ₹3,00,000

Here’s how the Income Tax Calculator for the New Regime will work:

  1. Initial Income: ₹8,00,000
  2. Standard Deduction: ₹50,000
  3. Total Deductions:
    • Voluntary Retirement: ₹2,00,000 (within the limit of ₹5,00,000)
    • Gratuity: ₹5,00,000 (within the limit of ₹20,00,000)
    • Leave Encashment: ₹3,00,000 (within the limit of ₹25,00,000)
  4. Net Taxable Income: ₹8,00,000 – ₹50,000 – ₹2,00,000 – ₹5,00,000 – ₹3,00,000 = ₹0
  5. Tax Calculation: No tax since the net taxable income is zero.

The Income Tax Calculator for the New Regime will display “Income Tax: ₹0”.