Compare old vs new tax regime

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See which regime saves you more tax under FY 2024-25 slabs — new regime's lower rates vs old regime's deductions.

Budget 2024 Updated Live Calculation Both Regimes

Income details

New regime auto-applies ₹75K std deduction + ₹7L rebate. Old regime needs deductions to compete.

Tax regime

Annual gross income

Total deductions (80C+80D+HRA+...) — Old regime only

Quick rules

New regime — lower rates, only ₹75K std deduction, no 80C/HRA.
Old regime — higher rates but allows 80C (₹1.5L), 80D, HRA, etc.
87A rebate — New: full rebate up to ₹7L taxable; Old: up to ₹5L taxable.
Cess — 4% Health & Education cess on tax in both regimes.

Total tax payable

₹71,500

Total tax under New Regime (incl. 4% cess)

Gross income₹12.00 L

DeductionsN/A (New regime)

Taxable income₹11.25 L

Income tax₹68,750

Cess (4%)₹2,750

Total tax₹71,500

Other regime tax—

Recommendation—

How income tax is calculated

Tax depends on the regime, deductions, and slab in which your taxable income falls. The new regime has lower rates but limited deductions.

01
Compute taxable income
Gross income minus standard deduction (and old-regime deductions like 80C).
```
taxable = gross − std_ded − deductions
```
02
Apply slab rates
Each slab has its own rate. Sum the tax across slabs.
```
tax = Σ (slab_chunk × slab_rate)
```
03
Cess + rebate
Add 4% cess; subtract 87A rebate if eligible (≤ ₹7L new, ≤ ₹5L old).
```
total = (tax − rebate) × 1.04
```

FormulaTax = Σ (slab × rate); Total = (Tax − 87A rebate) × 1.04 (cess)FY 2024-25 New Regime: 0/5/10/15/20/30% slabs. Old: 0/5/20/30%.

Why we use this formula by default.
Indian payroll convention, statutory references, and the SaaS tooling that runs payroll all converge on this approach. Below are the authoritative sources we cross-checked.

Statute

Income Tax Act, 1961

Primary statute governing all personal income taxation in India.

Latest Budget

Union Budget 2024

FY 2024-25 slabs, ₹75K std deduction, 87A rebate updates.

Authority

incometax.gov.in

Official Income Tax Department portal for slabs and circulars.

Tax SaaS

ClearTax / Tax2Win

India's leading consumer ITR + tax computation engines.

Practitioner

Khaitan & Co Tax Commentary

Top tax law firm commentary on slabs and amendments.

Standard

ICAI Direct Taxes

Institute of Chartered Accountants of India direct tax reference.

FAQs about income tax

Which regime should I choose?

Generally: deductions > ₹3L total → Old wins. Deductions < ₹2L → New usually wins. The exact break-even depends on income. Use this calculator with your actual deductions filled in to compare.

Can I switch regimes every year?

Salaried employees: yes, you can switch every year while filing ITR. Business income: once you choose New, you can't go back unless you stop business income.

What's included in the ₹1.5L 80C limit?

EPF contribution, ELSS mutual funds, PPF, life insurance premiums, home loan principal, NSC, 5-year tax-saver FD, Sukanya Samriddhi, NPS Tier I (up to a sub-limit). Total cap: ₹1.5L per year.

Is HRA available in new regime?

No — HRA exemption is only available in the Old Regime. If you pay significant rent (especially in metros), Old regime may win even with smaller 80C deductions.

What is the standard deduction?

New Regime: ₹75,000 (FY 2024-25). Old Regime: ₹50,000. Applied automatically to all salaried taxpayers, including pensioners.

How does the 87A rebate work?

If taxable income (after deductions) is ≤ ₹7L in New regime or ≤ ₹5L in Old regime, your entire tax becomes zero (only cess if any). It's a powerful threshold to plan around.

What if I have multiple income sources?

Salary + freelance + rental + capital gains: all add to gross. Each has its own treatment for deductions. Consult a CA if total income > ₹50L.

When are advance tax payments due?

If total tax liability > ₹10,000/year: pay 15% by Jun 15, 45% by Sep 15, 75% by Dec 15, 100% by Mar 15. Late = interest under 234B/234C.

Ready for the next step?

Auto-compute tax in payroll

Superworks calculates TDS for every employee under chosen regime each month — with Form 16 generation, declaration tracking, and one-click ITR exports.

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Compare old vs new tax regime

Income details

Quick rules

How income tax is calculated

Compute taxable income

Apply slab rates

Cess + rebate

Income Tax Act, 1961

Union Budget 2024

incometax.gov.in

ClearTax / Tax2Win

Khaitan & Co Tax Commentary

ICAI Direct Taxes

FAQs about income tax

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