Income Tax Calculator (FY 2023-24)

Calculate your income tax liability under the New and Old Tax Regimes.

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Enter income details to calculate tax

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Income Tax Calculator – Optimize Your Tax Liability

Navigating the Indian income tax landscape can be complex, especially with the introduction of the dual tax regime system. Understanding where you stand and which regime benefits you more is the first step towards smart financial planning.

Our Income Tax Calculator for FY 2023-24 (AY 2024-25) simplifies this process. It automatically calculates your tax dues under both the Old and New Tax Regimes, helping you identify the most tax-efficient option for your specific income and investment profile.

New vs. Old Tax Regime: Which One Wins?

The "best" regime isn't universal; it's personal. Here is a quick breakdown to help you decide:

The New Regime (Default)

Pros: Lower tax rates, simplified structure, no need to lock funds in tax-saving instruments.
Cons: You lose out on major deductions like HRA, LTA, and Section 80C.
Verdict: Ideal for those with income up to ₹7.5 Lakhs or those with minimal deductions.

The Old Regime

Pros: Allows extensive tax saving through deductions (80C, 80D, Home Loan Interest).
Cons: Higher tax rates if you don't claim deductions.
Verdict: Ideal for high-income earners with significant investments and expenses eligible for tax breaks.

Key Highlights for FY 2023-24

  • Tax-Free Limit: Income up to ₹3 Lakhs is exempt from tax under the New Regime.
  • Rebate under 87A: Full tax rebate for taxable income up to ₹7 Lakhs in the New Regime (effectively zero tax).
  • Standard Deduction: A flat deduction of ₹50,000 is now available to salaried individuals and pensioners under both regimes.
  • Leave Encashment: The exemption limit for non-government employees has been increased to ₹25 Lakhs.

Frequently Asked Questions (FAQs)

Can I switch between Old and New Regimes every year?

Salaried individuals can choose the most beneficial regime every year when filing their ITR. However, individuals with business or professional income can switch back to the Old Regime only once in their lifetime; once they opt for the New Regime, they are generally locked into it.

Is HRA exemption available in the New Regime?

No, House Rent Allowance (HRA) exemption is not available under the New Tax Regime. If you are paying significant rent and receiving HRA, the Old Regime might be more beneficial.

What is the surcharge rate for high income?

Under the New Regime, the highest surcharge rate has been reduced from 37% to 25% for income exceeding ₹5 Crores. This significantly lowers the effective tax rate for High Net-Worth Individuals (HNIs).

Are Section 80C deductions applicable in the New Regime?

No, deductions under Section 80C (PPF, LIC, ELSS, EPF, etc.) are not allowed in the New Regime. You cannot claim tax benefits for these investments if you opt for the new tax rates.

What is the difference between Financial Year (FY) and Assessment Year (AY)?

Financial Year (FY) is the year in which you earn the income (e.g., April 1, 2023, to March 31, 2024). Assessment Year (AY) is the year following the FY in which your income is assessed and you file your returns (e.g., April 1, 2024, to March 31, 2025).