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The new tax regime introduced fresh avenues. Here’s how you can use the income tax calculator new regime to determine tax liabilities.

How to Calculate the New Tax Regime

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"How to Calculate the New Tax Regime"

Ulfath Joad

From budgeting to expenses management and everything in between

<p>
    The new tax regime is applicable from 2023 and offers the chance to shift from the old system. But since you might be familiar with the deductions and benefits of the old regime, the new taxation method feels like an unexplored area. But there is a solution. Using an
    <strong>
     income tax calculator new regime
    </strong>
    tax rates and deductions can become clearer.
   </p><p>
    The calculator is a great way to ascertain which tax regime is more suitable. But how to get started with the calculations?
   </p><h2>
    Purpose of an Income Tax Calculator
   </h2><p>
    With all the new avenues and deductions, it can be challenging to calculate your income tax under the new regime. What an income tax calculator does is it simplifies the process for you. It estimates the taxes you owe based on inputs like your annual salary and profits from other avenues like shares or real estate sales. Best of all, it’s free to use!
   </p><p>
    A
    <strong>
     tax calculator new regime
    </strong>
    is also valuable for exploring investment opportunities. Several calculators provide you with investment options after accounting for your tax liabilities for a given financial year.
   </p><p>
    Here are some of the inputs required by an income tax calculator:
   </p><ul role="list">
    <li>
     Total annual salary
    </li>
    <li>
     Income from other sources
    </li>
    <li>
     Age of the taxpayer
    </li>
    <li>
     Housing rent paid
    </li>
    <li>
     Amount invested in child’s education (if any)
    </li>
   </ul><p>
    In accordance with the new regime, you might also be asked for more inputs to calculate your tax liabilities accurately.
   </p><h2>
    How is the Calculation Performed?
   </h2><p>
    The new regime has provided relief from taxes to individuals earning up to INR 3 lakhs per annum. So, when you opt for the new tax regime, you are liable to pay taxes only if you earn more than INR 3 lakhs per annum.
   </p><p>
    After you have confirmed your annual salary, follow these steps to calculate your tax liabilities:
   </p><h3>
    Check and Specify your Gross Total Income
   </h3><p>
    Gross income refers to the total earnings during a specific time period, excluding taxes and other liabilities. It counts the sum from your salary from your job, freelance work, and the capital gains from avenues like shares, mutual funds or property sales.
   </p><h3>
    Explore and Claim the Deductions
   </h3><p>
    While the new tax regime has reduced the number of deductions, it still offers benefits of up to INR 50,000 for taxpayers. Some of the available deductions are as follows:
   </p><ul role="list">
    <li>
     House rent allowance
    </li>
    <li>
     Leave travel concession
    </li>
    <li>
     Monthly interest paid on home loans
    </li>
    <li>
     Business expenses
    </li>
    <li>
     Medical insurance policies for self and immediate dependents
    </li>
    <li>
     Contributions to the National Pension Scheme (NPS)
    </li>
    <li>
     Contributions to charity
    </li>
    <li>
     Repaying education loan
    </li>
   </ul><p>
    Subtracting the deductions from the gross total income will provide your net total income. This is the amount from which you can calculate your tax liabilities. You can also use the
    <strong>
     new tax regime calculator to
    </strong>
    know all the relevant deductions.
   </p><h3>
    Refer to the Income Slabs to Detect Payable Tax
   </h3><p>
    Use your net total income to check and confirm the relevant tax slab. The new tax regime comprises six income brackets, with the percentage of taxable income differing in each. If you have already paid taxes in the form of TDS, or self-assessment tax, deduct this amount from the net payable amount.
   </p><h2>
    Final Thoughts
   </h2><p>
    It can be challenging to keep track of your finances to keep some amount aside for taxes. Here’s where Fi Money’s AI-powered Analyser comes to your rescue! Know your money &amp; grow your money as Analyser tracks your expenses across Merchants, Categories like food and entertainment, and Time (daily/monthly expenses).
   </p><p>
    FYI: Fi also believes in providing non-intrusive nudges to multiply your savings or investments! Access your credit score in a few steps with The Insights Hub on the Analyser and realise why 2.5 million people trust Fi to keep a 360-degree view of their money!
   </p><h2>
    Frequently Answered Questions
   </h2><h3>
    1) How do I calculate my take-home salary with the new tax regime?
   </h3><p>
    You can calculate your take-home salary by deducting income tax, PF contribution and professional tax from the gross income.
   </p><h3>
    2) How much tax will I pay under the new tax regime?
   </h3><p>
    If you earn less than INR 3 lakhs per annum, you are not required to pay taxes under the new regime. Otherwise, here are the avenues:
   </p><ul role="list">
    <li>
     INR 3,01,000 – INR 6,00,000 – 5% tax
    </li>
    <li>
     INR 6,01,000 – INR 9,00,000 – 10% tax
    </li>
    <li>
     INR 9,01,000 – INR 12,00,000 – 15% tax
    </li>
    <li>
     INR 12,01,000 – INR 15,00,000 – 20% tax
    </li>
    <li>
     INR 15,01,000 and above – 30% tax
    </li>
   </ul>

How to Calculate the New Tax Regime| Fi.Money

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