Income Tax Calculator for FY 2023-24

About Major Changes

A major change introduced in the finance bill 2023 is making the New Income-Tax regime as the default option for all salaried taxpayers, though, with the option to select the old tax regime. The change is an indication of the government's intention to cease the complicated taxation process with the exemptions and deductions by introducing a simple tax calculation with lower tax rates, in other words, the State wants to tell the taxpayers that, "Give to Caesar the things that are Caesar's and to God the things that are God's." (Mark 12:17).

About Tax Payments

As our tax payments are supposed to be used by the government for conducting various development projects of the country through welfare schemes including funding of public infrastructure, expansion& welfare projects, and employment programs. Hence it is the responsibility of every individual to remit the due taxes to the Govt, as in return these taxes are expected for the growth of every individual. As Aristotle said, "When the society /organization grows all those who connected it also grow equally, however, if the individuals are growing beyond the society/organization, the entire setup of the State/Society may fail. The Golden Rule mosaic says,"Do Unto Others as You Would Have Them Do Unto You", every individual is expected to follow this rule to get rewarded as they expect. Remit the due taxes for the development of the State/society and which in turn for growth the benefit of the nation and everyone.

About Tax Savings

Tax savings are legal, but tax evasion through the loopholes of the tax saving options is to be reviewed based on the following text from Bible; 'All things are lawful', but not all things are beneficial. 'All things are lawful', but not all things build up" (1 Cor 10:23)

This Article has an Automatic Income Tax Calculator in Excel Format for Financial Year 2023-24 (AY 24-25). The income Tax Calculator is Useful for salaried employees of the government and private sector.

Hope this Tax calculator will help you to Boost your tax plans, wishing you a Happy Financial New Year!

Major changes affecting the taxation of salaried employees

Following are the major changes affecting the taxation of salaried employees, which they need to assess thoroughly and plan their taxes.

1. The new tax regime under Section 115BAC is proposed to serve as the default regime.
2. Standard deduction from salary income and family pension is extended to the employees who opt for New Tax Regime.
3. The revised basic exemption limit will be INR 3,00,000 and for every additional INR 3,00,000 of income, the next slab rate will be applicable. The highest slab rate of 30% shall continue to apply to income above INR 15,00,000.
4. The total income eligible for rebate under Section 87A has increased from INR 5,00,000 to INR 7,00,000 for taxpayers opting for the new tax regime.
5. Under the new tax regime, the highest surcharge rate of 37% on income above INR 5,00,00,000 has been reduced to 25%. Surcharge rates remain the same under Old Regime.

Income tax slabs

A comparison of the deductions and exemptions available under the new and the old tax regime is given below. One can decide whether to select Old Regime or New Regime based on what all investments and payments are done/applicable to them.

• Go for the New tax regime if income is Rs 7.5 lakh and less - it is a straightforward choice, as there is no tax deduction for individuals having income up to Rs 7.5 lakh.
• If you do not have any tax-saving investments or expenditures.
• Choose the new tax regime if only Rs 1.5 lakh can be claimed as deduction under 80C. An individual who just avail a deduction of Rs 1.5 lakh under section 80C, the new tax regime would be more beneficial.

When does one opt for Old Regime?

Choose the old tax regime if, apart from 80C deductions, if you are paying housing loan interest or Rent payments or more tax-saving expenditures like medical insurance, NPS payments, and other chapter VI-A deductions.

When Gross Income is 16 lakh and one who has a deduction of 4.25 lakh (Sec 80C- 1.5 lakh, interest on housing loan Rs.2.0 lakh, and Medical Insurance Rs.25,000 and Std. Deduction Rs.50,000), then income tax under both the Old and the New tax regime is the same, i.e.The break-even point for Old and New Tax Regime. When eligible deductions are more, the lower will be the tax liability under old tax regime.

Hope the above-mentioned details are helpful to plan your tax plans.

Click here to Download Automatic Income Tax Calculator in Excel Format for FY 2023-24 (AY 24-25)

The author can also be reached at bennythadathil@gmail.com.