Which tax regime is better?

It depends on your deductions. If you claim significant deductions (80C, 80D, HRA, home loan interest) totaling over ₹3-4 lakh, the old regime is usually better. If you have minimal deductions, the new regime with its lower slab rates will save more tax.

What is Section 87A rebate?

Section 87A provides a tax rebate for individuals with taxable income up to ₹5 lakh (old regime) or ₹7 lakh (new regime). The rebate effectively makes your tax liability zero, meaning you pay no income tax if your taxable income is within these limits.

How to switch between regimes?

Salaried individuals can switch between old and new tax regimes every financial year at the time of filing their return. Business owners who opt for the new regime can switch back to the old regime only once in their lifetime.

What income is tax-free?

Income up to ₹2.5 lakh is in the nil tax slab under both regimes. Additionally, with Section 87A rebate, income up to ₹5 lakh (old) or ₹7 lakh (new) is effectively tax-free. Agricultural income is fully exempt from tax regardless of the amount.

Tax Slab Calculator

Calculate your income tax based on the latest tax slabs. Compare old vs new regime and find the best option.

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Tax Regime

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ముఖ్యం — నిర్ణయించే ముందు చదవండి

The new tax regime offers lower tax rates but eliminates most exemptions and deductions like 80C, 80D, and HRA
The old tax regime allows deductions under Section 80C (up to ₹1.5L), 80D (health insurance), HRA, and more
Under Section 87A, income up to ₹5 lakh (old regime) or ₹7 lakh (new regime) is effectively tax-free due to rebate
The new regime provides a standard deduction of ₹50,000 for salaried individuals from FY 2023-24 onwards
A surcharge of 10-37% applies on income tax for income exceeding ₹50 lakh, significantly increasing the tax burden
If your total tax liability exceeds ₹10,000 in a year, you must pay advance tax in quarterly installments
Most salaried employees already have TDS (Tax Deducted at Source) handled by their employer — check Form 26AS to verify
Section 80C investments (PPF, ELSS, LIC) and Section 80D (health insurance premiums) are the most common deductions in the old regime

వీటిని నిర్లక్ష్యం చేస్తే ఏమి జరుగుతుంది?

Choosing the wrong tax regime can cost you thousands in unnecessary taxes — always compare both before filing
Not filing income tax returns on time (before July 31) leads to penalties, interest, and loss of carry-forward benefits
Ignoring advance tax obligations results in interest under Section 234B and 234C added to your tax liability
Missing available deductions under the old regime means paying more tax than legally required
Non-filing of returns can attract a penalty of up to ₹10,000 and prosecution for high-income earners

స్మార్ట్ చిట్కాలు

Always compare tax liability under both old and new regimes before making a choice — use this calculator for both
Maximize Section 80C deductions with ELSS, PPF, or NPS contributions to reduce taxable income under old regime
Consider investing in NPS for an additional ₹50,000 deduction under Section 80CCD(1B) beyond the 80C limit
File your income tax return before July 31 every year to avoid penalties and claim refunds faster
Use Form 26AS and AIS (Annual Information Statement) to verify all TDS deducted and income reported
Keep all investment proofs, rent receipts, and medical bills organized throughout the year for hassle-free filing

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