The Income-Tax Department has launched an e-calculator for individuals to estimate their tax liability under both the schemes.
In the new personal income tax regime, as proposed by Union Finance Minister Nirmala Sitharaman in her Budget speech on February 1, 5 per cent tax is levied on an annual income between Rs 2.5 lakh to Rs 5 lakh.
The tax rate rises to 10 per cent, 15 per cent, 20 per cent and 25 per cent for every Rs 2.5 lakh addition. A 30 per cent tax is charged for income over Rs 15 lakh.
The old or the existing income tax rate regime allows a standard deduction of Rs 50,000 and investment of Rs 1.5 lakh in saving schemes with a rate of 5 per cent, 10 per cent or 30 per cent tax depending on various income levels.
E-calculator can be used by taxpayers who opt for the new tax slabs, as announced in the recent Budget, without claiming deductions and exemptions, for Income Tax Returns filing.
Here are some benefits of E-calculator to the taxpayers:-
a) E-calculator comes with a comparative table to help resident individuals (the financial year 2020-21) compare taxes in the old and the new tax regime.
b) Taxpayers in three age categories, namely
- normal citizen (below 60 years),
- senior citizen (60-79 years) and
- super senior citizen (above 79 years)
can fill in their estimated annual income from all sources, total eligible deductions and exemptions to analyze what will there total taxable income be if they continue in the old regime or opt for the new one.
c) The calculator takes into account eligible exemptions and deductions, as proposed under the new regime, after being extracted from the Budget memorandum 2020.
d) It has been hosted on the official e-filing website of the department.
e) Now taxpayers can compute their taxes under both the schemes and choose accordingly which will be beneficial for them.
f) It provides easy comparison under both the schemes.