Tax Tips: IT department's tax calculator will tell you how much tax you will save, will make your work easier, know how..

Income Tax Calculator: In Budget 2025, Finance Minister Nirmala Sitharaman made income up to Rs 12 lakh tax-free under the new tax regime. Due to this middle-class taxpayers are very happy. However, many taxpayers are still confused about how much their tax liability will be reduced after the changes made in Budget 2025 or how much less tax they will have to pay now as compared to earlier. To solve this problem, the Income Tax Department has launched a tax calculator which is very easy to use. With the help of this tax calculator, it can be easily found out how much tax you had to pay earlier and how much tax you will be able to save now from the new financial year.

With the help of this tax calculator, you will be able to know how much tax you will have to pay under both the old and new tax regimes. That is, this calculator can tell you whether the option of a new tax regime is more beneficial for you or the old tax regime.

Default tax system

The government is promoting the New Tax Regime as the default tax system, so many amendments have been made in Budget 2025 to make it more attractive. After making income up to Rs 12 lakh tax-free in Budget 2025, the New Tax Regime is now more attractive to taxpayers than the Old Tax Regime. The government has also increased the basic exemption limit in the new tax regime from Rs 3 lakh to Rs 4 lakh. Overall, the government is trying to make more and more taxpayers opt for the new tax regime.

How to use the calculator?

Taxpayers will have to visit the Income Tax Department website to use this calculator. You can use this calculator to find out which tax regime is more beneficial for you, old or new. Let us tell you the step-by-step process of using it.

Step 1- First of all go to the official website of the Income Tax Department.

Step 2- Now select the "Income Tax Calculator" section.

Step 3 - Then enter your Residential Status.

Step 4 - Now you have to enter your total Taxable Income (note that this excludes special rate income such as capital gains etc.).

Step 5 - After entering the taxable income, the calculator will compare your tax liability according to the old and new tax regimes. This will let you know how much you are saving on tax now.

This calculator of the Income Tax Department highlights the net tax savings under the new tax regime, making it easier for taxpayers to understand how much more they can save from April 1, 2025, due to the revised income tax slab.

The government's emphasis on making the new tax regime attractive

The New Tax Regime, which was introduced by the government in the financial year 2020-21, has been amended in Budget 2025 to make it more attractive. Some of the latest features available in it include:

Default Tax Regime The government is trying to make the new tax regime easier and it still remains a default option. In Budget 2023, the New Tax Regime was made the default tax system for the financial year 2023-24.

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