NEW DELHI: The recent Union Budget 2020-21 announced new personal income-tax slabs for those taxpayers who would let go of all existing exemptions such as house rent allowance and standard deduction, triggering a debate. While the Centre claims that switching to the new tax regime will be of benefit to taxpayers, personal finance experts stand firm behind the existing one.
In order to fix such confusions, the Income-Tax Department has launched an e-calculator. With this, individuals can estimate their tax liability if they opt for the new tax slabs for ITR filing, without claiming deductions and exemptions as announced in the recent budget, so that they can decide for themselves.
The calculator has a comparative table to compare taxes in the old and new regimes, for resident individuals (FY21). It is already available on the official e-filing website of the I-T department. The web portal is used for filing of electronic income-tax returns by individuals and other categories of taxpayers.
Currently, taxpayers in three age categories — normal citizen (below 60 years), senior citizen (60-79 years) and super senior citizen (above 79 years) — can punch in their estimated annual income from all sources, as well as total eligible deductions and exemptions, to see what would be their total taxable income if they continue in the old regime or opt for the new one. The calculator takes into account eligible exemptions and deductions as proposed under the new regime, after being extracted from the budget memorandum 2020.
“This calculator is only meant to provide a basic idea of the estimated impact of the new provisions. Refer to income-tax provisions for the actual provisions and eligibility,” a disclaimer on the link said. Under the new regime, taxpayers will pay 10 per cent for income of Rs 5-7.5 lakh, 15 per cent for Rs7.5-10 lakh, 20 per cent for Rs 10-12.5 lakh and 25 per cent for Rs 12.5-15 lakh. Previously, taxpayers paid 20 per cent for income of Rs 5-10 lakh and 30 per cent for income of Rs 10-15 lakh.
How to use e-calculator
Open income-tax department’s e-filing website https://www.incometaxindiaefiling.gov.in
Click on ‘Tax Calculator FY 2020-21 On next page, choose your age from the dropdown
Enter your Estimated Annual Income, which is your gross income from all sources
Then, enter Exemptions/Deductions that you may avail
Click on the ‘Compare Tax under Existing and New Regime’ button to submit