New income tax calculator released by IT department: Compare old and new regimes to determine tax liability

The Income Tax Department recently launched a new tax calculator that helps taxpayers determine whether they would be better off under the old or new income tax regimes. Online tax calculators are available on the internet, and they estimate a taxpayer's liability based on factors like income, deductions, and tax credits. While these calculators provide a general idea of how much a taxpayer owes or will receive in a refund, they are not always accurate.

Calculating income tax is essential because it helps individuals budget their finances. Knowing how much tax they need to pay allows them to plan their expenses and save money accordingly. This helps them avoid overspending and falling into debt.

To use the Income Tax Department's tax calculator, taxpayers must log into the IT department portal and provide specific information, such as their tax payer type, gender, residential status, income other than salary and special rate income, interest on self-occupied house property, deductions allowed under both regimes, and deductions or exemptions not eligible in the new tax regime. After entering this information, the portal will present the number under old and new tax regimes.

It is crucial to note that the Income Tax Department has underlined a disclaimer, stating that the calculator only provides basic tax calculation and does not purport to give the correct tax calculation in all circumstances. For filing returns, the exact calculation must be made as per the provisions contained in the relevant Acts, Rules, etc.

Read more: New Tax Regime: Need clarity on India's new tax system? Here's all you need to know