According to the new tax regime announced in the Union budget of 2023, the basic exemption limit has been hiked from earlier, from 2.5 lakh to 3 lakhs. The income tax slabs have also been reduced to five from six FY2023-24. The new tax regime is the default tax rate for 2023-24 fillings. However, the taxpayers do have a choice to do their ITR fillings under the old Tax regime.

Individuals planning to opt for the old tax regime in FY 2023-24 will be specifically required to opt for it. The government has reduced the surcharge of the highest rate from 37% to 25% in the new tax regime.

The tax slabs under the new tax regime are given below in the following table

The above-given tax slabs are age-neutral. Unlike the old tax regime where the taxes were different for different age groups. The new tax regime applies to every individual. Shalini Jain, Tax Partner, EY India, says,' In line with the expectations of making new tax regime more attractive for individuals, the Finance Minister has announced new income slabs bringing down the overall tax outgo for the middle-income-earner group in FY 2023-24.'

So, for the people confused with the old and new tax regime here's a brief. The new tax regime was announced in the union budget of 2020 and became effective in FY2020-21 till now. Till FY2022-23 the old regime was the default option. Hence, a salaried individual gets the option to opt for the old tax regime and continue to avail of common tax deductions and tax exemptions. Else, he/she can opt for the new concessional income tax regime, without any common tax deductions and tax exemptions. Under the new tax regime, the individual will forego 70 deductions and tax exemptions, which include HRA tax exemption, LTA tax exemption, deduction up to Rs 1.5 lakh under Section 80C and so on.

The income tax calculator is a mathematical utility tool. The tool tells you to calculate your income tax liability based on the inputs that you provide to the system. Filling your tax returns on time is the duty of a responsible citizen of the country. The thought of filling your income tax returns by yourself seems like a very strenuous task. Especially, if you are very early in your career. You must understand how taxes work and how important it is to file them on time.

Using Pocketful’s online Income Tax calculator you don't have to rely upon professionals or other people to file your Taxes. Pocketful’s online income tax calculator computes your tax liability based on the latest updates announced by the Ministry of Finance and the details provided by you. Pcoketful’s Indian income tax calculator lets you calculate your tax without any cost. Not only this its smooth interface offers a very beginner-friendly approach to the users.

The steps to use our income calculator, are given below:

First, choose the regime in which you want to file your taxes. There are two options old regime and the new regime. The old regime is the default option.

1. After selecting the old regime, the next step is to select, the assessment year for which you want to know the tax liability amount..

2. After selecting the assessment year next step is selecting the age group to which you belong. Important note- The age limit is only applicable to the old regime and not to the new regime.

3. Then fill in all the income details shown on the screen.

4. After filling in the income details, enter the deductions that you might have received in the financial year.

5. The last step is filling in your HRA exemption details.

1. In the new regime, the first step is to select the assessment year for which you want to know your tax liability

2. Important note- under the new tax regime there are no age barriers, unlike the old tax regime as stated above.

3. Fill in all the income details shown on the screen, like gross salary income, annual income from other sources, annual income from interest, rental income, etc.

4. In the case of the new regime Deductions, and HRA exemptions are not applicable

Voila! The results are shown on your screen.

Various advantages of using an income tax Calculator, are listed below

• Estimated liability:

  The income tax calculator gives you an estimated income that you are liable to pay to the government.

• Easy Comparison

  Using our online calculator, you can decide and see the difference in the amount of filing your ITR under the old or new tax regime.

• Track your growth:

  You can keep track of your taxes using the income and tax calculator. You can see how much taxes you are paying.

• Easy to use:

  Online calculators are easy to use, as they offer a very user-friendly interface. That makes it very interactive to use.

• Cost-effective:

  All the online investment calculators are free. That makes them very cost-effective. Otherwise, earlier, these calculations were done by financial advisors who charged hefty consulting fee

1. Acts as a legal document:

   ITR filings hold great legal power. It acts as a legal document in two ways. As identity proof when applying for documents like an Adharar card or so. Apart from that ITR can also be recognised as income proof.

2. Helps in claiming deductions:

   To encourage people to file taxes the government provides some reliefs and deductions. People can claim back the TDS and rebates. But for all this, the person first has to file their ITRs

3. Helps in applying for loans:

   ITR is required while applying for loans. As it acts as proof that you do have a stable source of income and that you will be able to repay the loan. Not only while applying for loans from the bank, but ITR can also be useful to get you a credit card as well. Credit card companies also ask for your past salary and returns before issuing you the card.

4. Avoid penalties and punishment::

   Every citizen is obliged to pay Texas if their annual income is above the basic exemption limit. Not filing taxes can result in a penalty of up to 5,000 rupees and other serious punishments. Therefore, you should file your ITRs on time to avoid, any such situations

5. Helps while applying for VISA:

   ITR is one of the important documents required while applying for VISA because of two main reasons. The first being is that it strengthens your case & the second is that it informs the embassy about your financial position.