Tax Calculation Formula:
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The tax regime comparison calculator helps taxpayers determine which tax regime (old or new) would result in lower tax liability based on their income and applicable rates and adjustments.
The calculator uses the tax calculation formula for both regimes:
Where:
Explanation: The calculator computes tax liability under both regimes and compares them to show which one is more beneficial.
Details: Choosing the right tax regime can result in significant tax savings. This calculator helps make an informed decision between the old and new tax regimes.
Tips: Enter your taxable income in dollars, the applicable tax rates for both regimes (as percentages), and any additional adjustments for both regimes. All values must be valid (income > 0, rates between 0-100).
Q1: What's the difference between old and new tax regimes?
A: The new regime typically has lower rates but fewer deductions, while the old regime has higher rates but more deduction options.
Q2: Can I switch between regimes every year?
A: In many tax systems, you can choose which regime to use each year, but check your local tax laws for specific rules.
Q3: What counts as "adjustments"?
A: Adjustments can include standard deductions, special allowances, or any fixed amounts added to/subtracted from your tax calculation.
Q4: Should I always choose the regime with lower tax?
A: While tax savings are important, also consider other factors like compliance complexity and future financial plans.
Q5: How accurate is this calculator?
A: This provides an estimate based on your inputs. For exact calculations, consult a tax professional or official tax software.