Income Tax Calculator FY 2023-24(AY 2024-2025)

Q: How do you calculate income tax?

The calculation of income tax has become very easy with the usage of an income tax calculator , which helps in calculating the net taxable income and total tax liability in both the old and new tax regimes. The steps to be followed to calculate the income tax liability are: • Firstly, calculate your total gross income from salary, which is a total of your basic salary, HRA allowance, other allowances, and LTA, or standard deduction of ₹50,000 in the old regime.` • The second step is to calculate the total tax benefits by adding all the other income sources, such as LTCG and interest income, and thereby deducting all the exemptions available in sections 80C to 80U in the case of the old regime. The new regime provides minimal deductions or exemptions. • After that, calculate the net taxable income, which is net income from all sources less the deductions and exemptions given in each regime. • The final step involves calculating the total tax liability based on the tax slabs in the old and new regimes, and adding the health and education cess and surcharge.

Q: What is the income tax slab for AY 2023-24 for individual taxpayers?

The tax slabs for each taxpayer are different for each assessment year, which is announced in the Union Budget. The income tax calculator 2023 can be used to determine yearly tax liabilities for the assessment year 2023-24 in both tax regimes available to individual taxpayers. The financial year is different from the assessment year in calculating the income tax liability. The financial year is the year in which you receive the income, and the assessment year is the year in which the tax is calculated on that income. So, the assessment year starts after the financial year ends, so AY 2023–24 will be the assessment year for FY 2022–23.

Q: Can TDS be claimed in the new regime?

The TDS (Tax Deducted at Source) is the tax that is being deducted by your employer before paying you the total salary. However, you have the option to choose between the old and new tax regimes in TDS as well. You can inform your employer to choose the new tax regime for deducting the TDS. If you do not provide the declaration to the employer, he may choose to do it under the old tax regime. But if you fail to submit the declaration to the employer, you still have the option to choose the new tax regime at the time of filing the ITR and fulfilling the declaration under Form 10IE to change the regime submitted by the employer.

Income Tax Calculator lets you easily calculate the income tax outgo based on your salary and deductions. You can check your estimated income tax under both old & new regime as per the latest announcements in Budget FY 2023-24.

FY 2023-2024
FY 2022-2023

Introduction

Every year you have to pay a handsome amount from your yearly income. But you may be curious to know how much you have to pay in taxes, which can be easily calculated using the income tax calculator. Let's see how the income tax calculator is a very helpful tool to calculate the yearly tax liability based on the tax slabs announced in the Union Budget on February 1 every year.

In this section, you will learn and get to know about:

How to calculate income tax liability using the income tax calculator?
Income Tax Rates Under the New Tax Regime for AY 2023-24
Income Tax Rates Under the Old Tax Regime for AY 2023-24
Example of Income Tax Calculation
Other Taxpayers Slabs for AY 2023-24

How to calculate income tax liability using the income tax calculator?

The income tax calculator AY 2023-24 (assessment year) or financial year 2022-23 is available for free of cost on the income tax India website or on any other related website, which helps you to calculate yearly income tax liability at free of cost which has incorporated different types of taxpayers, acts, and rules applicable in it.

The steps of using the income tax calculator are:

Step 1: In the income details tab, add:

Gross Annual Income/ Salary
Rent paid
Interest Income
Other Income (Annually)
Basic Salary (Basic + DA)
HRA Received
Age
City of Residence

After entering in these details, click on continue:

Step 2: In the 'Investment Details' section, add in the amounts for:

80C Deductions (Term Insurance policies, PPF, ELSS Funds, Pension funds)
80 CCD (1B) (National Pension Scheme)
80 CCD 2 (Employer's Contribution to NPS)
80 D (Health Insurance Policies for self, spouse and children)
80 E (Interest on Education Loan)
80 EE ( Interest on Housing loan)
80G, 80 GGA, 80 GGC Donation
80 TTA

Click on continue. Now, you will get the output for Income tax applicable in old Tax Regime and New Tax Regime. In each of these tabs, the calculator gives the output as:

Total income
Total investments
Deductions
HRA Exemptions
Taxable income
Tax payable

The portal also provides a pie-chart detailing the portions for taxable income, total investments, HRA Exemptions and Deductions.

**The tax calculated here is a tentative figure.

Income Tax Rates Under the New Tax Regime for AY 2023-24

To calculate income tax online, it is important to know that tax exemptions and deductions are not allowed in the new tax regime. Therefore, the tax rates are lower as compared to the old tax regime. Also, the tax rates are the same for individuals below 60 and above 60 years of age.

Net Taxable Income Per Year	Income Tax Rates For Individuals and HUFs
Up to ₹ 2.5 lakhs	Nil
₹ 2.5 lakhs to ₹ 5 lakhs	5% above ₹ 2.5 lakhs
₹ 5 lakhs to ₹ 7.5 lakhs	₹ 12,500 + 10% above ₹ 5 lakhs
₹ 7.5 lakhs to ₹ 10 lakhs	₹ 37,500 + 15% above ₹ 7.5 lakhs
₹ 10 lakhs to ₹ 12.5 lakhs	₹ 75,000 + 20% above ₹ 10 lakhs
₹ 12.5 lakhs to ₹ 15 lakhs	₹ 1,25,000 + 25% above ₹ 12.5 lakhs
Above ₹ 15 lakhs	₹ 1,87,500 + 30% above ₹ 15 lakhs

The following are the important deductions allowed under the new tax regime:

The interest paid on the home loan for a rented-out property is deductible under Section 24(b).
The employer's contribution to the National Pension Scheme (NPS) is available under Section 80CCD (1B).
The maturity amount received and the interest receipt are also tax-free for the PPF and Sukanya Samriddhi Yojana.
A 4% health and education cess is applied in both regimes.

About Surcharge and Marginal Relief

A surcharge is an additional rate applied to an individual whose income exceeds a certain threshold, and the net income calculator also provides the taxpayer with an automated way to calculate it. The taxpayer who pays the surcharge amount and the normal tax amount will receive marginal relief up to the amount of the difference between the excess tax payable (including the surcharge) on income above ₹ 50 lakhs and the amount of income that exceeds ₹ 50 lakhs. Similarly, the marginal relief is applicable to other income ranges as well.

Income Range	Surcharge Rates
₹ 50 lakhs -- ₹ 1 crores	10%
1 crores - ₹ 2 crores	15%
₹ 2 crores - ₹ 5 crores	25%
More than ₹ 5 crores	37%

Income Tax Rates Under the Old Tax Regime for AY 2023-24

Section 115 BAC of the Income Tax Act provides salaried individuals in India the option of choosing between the old and new tax regimes. The salary tax calculator also calculates the old tax regimes that allow for deductions and exemptions and provide different rates for individuals below 60 years of age, senior citizens, and super senior citizens.

Net Taxable Income Per Year	Tax Rates for Individuals below 60 years and HUFs
Up to ₹ 2.5 lakhs	Nil
₹ 2.5 lakhs to ₹ 5 lakhs	5% above ₹ 2.5 lakhs
₹ 5 lakhs to ₹ 10 lakhs	₹ 12,500 + 20% above ₹ 5 lakhs
Above ₹ 10 lakhs	₹ 1,12,500 + 30% above ₹ 10 lakhs

Net Taxable Income Per Year	Tax Rates for Senior Citizens Aged between 60 but less than 80
Up to ₹ 3 lakhs	Nil
₹ 3 lakhs to ₹ 5 lakhs	5% above ₹ 3 lakhs
₹ 5 lakhs to ₹ 10 lakhs	₹ 10,000 + 20% above ₹ 5 lakhs
Above ₹ 10 lakhs	₹ 1,10,000 + 30% above ₹ 10 lakhs

Net Taxable Income Per Year	Tax Rates for Super Senior Citizens Aged equal to or more than 80
Up to ₹ 5 lakhs	Nil
₹ 5 lakhs to ₹ 10 lakhs	20% above ₹ 5 lakhs
Above ₹ 10 lakhs	₹ 1,00,000 + 30% above ₹ 10 lakhs

The deductions can be claimed under Section 80C to 80U of the Income Tax Act, 1961 and some of the important deductions are:

The standard deduction is up to ₹50,000 for salaried individuals and also leave travel allowance (LTA) exemption.
The maximum amount that can be claimed under Section 80C of the Income Tax Act, 1961 for individuals and HUFs is ₹1.5 lakhs.

Example of Income Tax Calculation

The income tax calculator 2023 will be used to calculate the total tax liability in both the old and new tax regimes. Mr. X works in Delhi and has a basic monthly salary of ₹ 1.2 lakhs, an HRA of ₹ 60,000 per month, other allowances of ₹ 30,000 per month, and a leave travel allowance (LTA) of ₹ 40,000 per year.

His yearly income from long term capital gains is ₹ 50,000 and interest is ₹ 75,000. He has invested in Section 80C tax-saving options, an additional ₹ 50,000 in NPS, and a ₹ 25,000 medical insurance premium. He also claimed a ₹ 5,000 tax deduction under Section 80TTA for the interest on her savings account.

Subheadings	Old Regime (in ₹)	New Regime (in ₹)
Yearly basic salary	14,40,000	14,40,000
Yearly HRA	7,20,000	7,20,000
Yearly special allowance	3,60,000	3,60,000
Yearly LTA	40,000	40,000
Standard deduction	(50,000)	-
Gross Income from Salary	25,10,000	25,60,000
LTCG amount	50,000	50,000
Interest Income	75,000	75,000
Life Insurance premium paid	(25,000)	-
Contribution toward provident fund / PPF	(50,000)	-
Contribution toward NPF	(25,000)	-
Mr. X's contribution toward NPS under the Section 80CCD	(50,000)	-
Additional contribution towards NPS under the Section 80CCD(1B)	(50,000)	-
Employer's contribution toward NPS under the Section 80CCD	(50,000)	(50,000)
Medi-claim premium under the Section 80D	(25,000)	-
Interest earned on deposits in saving account under the Section 80TTA	(5,000)	-
Net Taxable Income	23,55,000	26,35,000
Income Liable to Tax at Normal Rate	23,05,000	25,85,000
Tax at Normal Rate	5,04,000	5,13,000
LTCG charge @ 10%	5,000	5,000
Income Tax Amount	5,09,000	5,18,000
Health and Education Cess	20,360	20,720
Total Tax Liability	5,29,360	5,38,720

So, as per the net pay calculator, the total tax liability that Mr. X has to incur is lower in the old tax regime as compared to the new tax regime. Therefore, the net salary calculator is very helpful for salaried individuals to calculate their annual tax liability under both regimes and decide which regime is best for them.

However, there is no sure shot rule to decide which one is better, but there are some insights on choosing the best one. The new tax regime benefits those with taxable incomes less than 15 lakhs, while the old tax regime benefits those with taxable incomes greater than 15 lakhs. The old tax regime is more helpful for an individual who has a tax-saving investment plan ready and actively chooses to invest in it than for an individual who doesn't have a strong investment plan.

A taxpayer may also change their tax regime every year based on their preferences and benefits. However, the non-salaried individual cannot make that switch frequently, and once they choose the new tax regime, they have to continuously do so.

Conclusion

The taxable income calculator provides approximate taxable income and annual tax liability. It is a quick and convenient tool to use that provides access to history and also helps you manage your expenses and investments in advance. Also, the calculation of income tax has become very easy without the need for prior knowledge, and the taxpayers are advised to use the income tax calculator for a comparative analysis of both regimes and then choose the one that is most beneficial for them.