Income Tax Calculator
Old vs. New Tax Regime: Which is Better?
Key Points
- Old regime offers deductions but higher tax rates.
- New regime has lower rates but fewer deductions.
- Use our calculator to compare tax liability.
Practical Example
For a ₹10,00,000 income, the Old Regime with ₹1,50,000 deductions yields a tax of ₹1,12,500. The New Regime yields ₹75,000, saving ₹37,500. Try our calculator to find the best regime.
Choosing the right regime saves taxes. Use our Income Tax Calculator to decide.
Maximize Tax Savings with Deductions
Key Points
- Utilize Section 80C for investments like PPF, ELSS.
- Claim standard deduction of ₹50,000 in both regimes.
- Our calculator shows deduction benefits.
Practical Example
For a ₹15,00,000 income in the Old Regime, ₹1,50,000 deductions reduce taxable income to ₹13,00,000, lowering tax from ₹3,37,500 to ₹2,62,500. Use our calculator to optimize deductions.
Deductions reduce your tax burden. Use our Income Tax Calculator to plan.
Plan Your Taxes with Pagla Tools Income Tax Calculator
Understanding your income tax liability is crucial for financial planning. Pagla Tools’ Income Tax Calculator for FY 2025-26 helps you estimate your tax under India’s Old and New Tax Regimes, considering income, deductions, and tax slabs. Make informed tax decisions effortlessly.
What is Income Tax?
Income tax is a tax levied by the government on an individual’s or entity’s income. In India, it’s governed by the Income Tax Act, 1961, with two regimes:
- Old Regime: Higher tax rates but allows deductions (e.g., Section 80C, standard deduction).
- New Regime: Lower tax rates but minimal deductions (only standard deduction).
- Cess: 4% Health and Education Cess on tax in both regimes.
Our Income Tax Calculator computes your tax liability based on the latest slabs.
How to Use Our Income Tax Calculator
Our Income Tax Calculator is simple and intuitive. Follow these steps:
- Enter Annual Income: Input your total annual income (e.g., ₹10,00,000).
- Specify Deductions: Enter Section 80C deductions for the Old Regime (e.g., ₹1,50,000).
- Choose Tax Regime: Select Old or New Tax Regime.
- Click Calculate: Hit the "Calculate Tax" button for instant results.
The calculator displays:
- Taxable Income: Income after deductions.
- Total Tax Payable: Tax including cess.
- Tax Savings: Difference between Old and New Regime taxes (if applicable).
- Bar Chart: Visual comparison of tax under both regimes.
Real-Life Problems Solved by Our Income Tax Calculator
Tax planning can be complex, but our calculator simplifies it:
- Regime Selection: Compare Old vs. New regimes. For ₹12,00,000 income, the Old Regime with ₹1,50,000 deductions yields ₹1,75,500 tax, while the New Regime yields 1,25,000, saving ₹50,500.
- Deduction Planning: See deduction benefits. For ₹10,00,000 income, ₹1,50,000 deductions in the Old Regime reduce tax from 1,37,500 to ₹1,12,500.
- Income Planning: Adjust income to stay in lower tax slabs. E.g., 7,00,000 income in the New Regime has ₹25,000 tax, but ₹7,50,000 increases it to ₹35,000.
- Budgeting: Estimate tax liability to plan monthly savings.
Benefits of Using Pagla Tools
Our Income Tax Calculator offers:
- Accuracy: Precise calculations based on FY 2025-26 tax slabs.
- Time-Saving: Instant results without manual calculations.
- Visual Insights: Bar chart comparing tax regimes.
- Flexibility: Test various income and deduction scenarios.
- User-Friendly: Intuitive interface for all users.
- Free Access: Available 24/7 on paglatool.com at no cost.
Additional Tips for Taxpayers
Optimize your tax planning with these tips:
- Maximize Deductions: Use Section 80C for investments like PPF, ELSS in the Old Regime.
- Compare Regimes: Choose the regime that minimizes your tax based on deductions.
- Invest Early: Start tax-saving investments early in the financial year.
- Keep Records: Maintain proof of deductions for tax filing.
- Consult Experts: Seek professional advice for complex tax situations.
Frequently Asked Questions (FAQs)
What is the difference between Old and New Tax Regimes?
The Old Regime offers deductions but has higher tax rates. The New Regime has lower rates but fewer deductions, only allowing a ₹50,000 standard deduction.
What is Section 80C?
Section 80C allows deductions up to ₹1,50,000 for investments like PPF, ELSS, and insurance premiums in the Old Regime.
Is the standard deduction available in both regimes?
Yes, a ₹50,000 standard deduction is available in both Old and New Regimes.
What is the Health and Education Cess?
It’s a 4% cess on the income tax amount, used for health and education initiatives.
Why Trust Pagla Tools?
Our Income Tax Calculator is:
- Expert-Designed: Built by financial experts.
- Transparent: Free with no hidden fees.
- Regularly Updated: Aligned with the latest tax slabs for FY 2025-26.
Visit paglatool.com to plan your taxes with confidence!