The Union Budget 2020 introduced a new personal tax regime for individual taxpayers. However, the option for such a concessional tax regime requires the taxpayer to forego certain specified deductions. These include a standard deduction of Rs 50,000, deduction under section 80C of Rs 1.5 lakh and interest on the self-occupied property of Rs 2 lakh which are availed by most taxpayers. As a result, the concessional tax regime may not always be beneficial to the taxpayer.
The Central Board of Direct Taxes (CBDT) via a circular dated April 13, has clarified that employers will have to deduct TDS from salary for financial year 2020-21 as per the tax regime new or old chosen by the employee. If an employee wants to go for the new tax regime he/she must inform the employer of this else by default TDS would be deducted as per old regime tax rates.
Thus the individual taxpayers are required to make a choice in advance regarding which tax regime they should opt for so that they can plan their investments (for deductions under section 80C, housing loan) accordingly. Thus an individual is required to make a decision that which tax regime he wants to opt for.
Here, I have enclosed herewith a tool that will auto-calculate your tax as per old tax regime as well as new tax regime, thus allowing you to get a conclusion regarding which tax regime is beneficial to you. You need to enter the input in the fields required. This will be very useful to salaried employees.
Benefits of Excel Calculator:
- The user needs to feed the data in the yellow highlighted cells and select data from drop-down list in orange highlighted cells and excel will auto calculate the tax as per both regime.
- This calculator has a unique feature of Auto calculating all the deductions and exemptions like 80C, 80D, HRA, NPS etc as per the Income-tax rules.
- The calculator will also auto calculate the final tax after considering rebate, surcharge if any as per both tax regimes.
- Also, read the instruction sheet in the calculator before proceeding to calculation.
You the download the same calculator from the Google Drive link given below :
https://drive.google.com/drive/folders/1BWksM4I5hjQU6UnMhE0TT61HTSpIwsyU
CAclubindia
