1. What is the New Tax Regime?

The new tax regime offers lower tax rates but removes most deductions and exemptions. It's optional for individuals to choose between the old and new regimes when filing their income tax returns.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Income Tax — Calculated based on new regime slab rates
• Professional Tax — Varies by state in India

Explanation: The new regime has different tax slabs with lower rates but fewer deductions compared to the old regime.

3. Importance of Tax Calculation

Details: Accurate tax calculation helps in financial planning, budgeting, and ensuring compliance with tax laws.

4. Using the Calculator

Tips: Enter your annual income in INR, select your age group and state of residence. The calculator will compute your tax liability under the new regime.

5. Frequently Asked Questions (FAQ)

Q1: Should I choose the new tax regime?
A: It depends on your income level and available deductions. The new regime benefits those with few deductions.

Q2: What are the tax slabs under new regime?
A: For FY 2023-24 (AY 2024-25), the slabs are 0%, 5%, 10%, 15%, 20%, and 30% with different income thresholds.

Q3: What is professional tax?
A: A state-level tax on employment levied by some state governments in India.

Q4: Can I switch between regimes?
A: Yes, salaried individuals can choose each year, while business professionals must be consistent.

Q5: Are there any deductions available in new regime?
A: Very few - mainly employer's NPS contribution and standard deduction of ₹50,000 for salaried individuals.