Section 115BAC Income Tax Calculator as per Finance Bill 2023 and the Income Tax Department has released a tax calculator that can be used by taxpayers for calculating their tax liability as per the revised Section 115BAC proposed in Finance Bill 2023.
Under Section 115BAC, the basic exemption limit has been raised from Rs 2.5 lakh to Rs 3 lakh. Moreover, this section was earlier applicable to individuals and HUFs only. As per Finance Bill 2023, this section will now be applicable to Individuals, HUF, the Association of Persons (AOP, other than cooperative societies), the Body of Individuals (BOI), and Artificial Juridical Person (AJP).
The Tax Calculator shared by the Income Tax Department will give you a comparison of tax liability under Old and New Regimes to be applicable from Assessment Year 2024-25.
The tax calculator can be accessed at – https://incometaxindia.gov.in/Pages/tools/115bac-tax-calculator-finance-bill-2023.aspx
To use this calculator, you will have to provide basic inputs like:
1. Taxpayer category (Individual, HUF, AOP/AJP/BOI
2. Age/Gender (Male, Female, Senior Citizen, Super Senior Citizen).
3. Resident Status (Resident, Non-Resident, Not Ordinary Resident)
4. Gross Salary (after deducting allowances exempted under both regimes) - Amount deductible/exempt from Gross Salary (except standard deduction) which is not allowed in the New Tax Regime.
5. Income other than salary and Special Rate Income
6. Interest on Self Occupied Property - Deduction allowed under both regimes (80CCH(2), 80CCD(2), 80JJAA, family pension deduction under section 57iia) and Deductions/exemptions (other than those mentioned above) not eligible in the New Tax Regime
After providing the above details, the tax calculator gives a comparison of tax liability under both Old and New Regimes.
Let’s assume the Gross salary of an individual is Rs 10 lakh after deducting allowances exempted under both regimes. Further, this individual is investing Rs 1.5 lakh under Section 80C and paying an interest amount of Rs 2 lakh for a self-occupied property. The calculator shows that this individual will have a tax liability of Rs 33,800 under the old regime and Rs 54,600 under the New Regime. Thus, Old Regime will provide this individual with a tax saving of Rs 20,800.