Income Tax
Also called: personal income tax
What is Income Tax?
Income tax is levied on the income of individuals and businesses for a financial year. Salaried individuals in India choose between the old regime with exemptions and deductions and the new regime with lower slab rates and fewer deductions.
Why Income Tax matters
The regime choice changes take-home pay materially, and it depends on how much a person actually claims in exemptions. It is worth computing both rather than assuming.
Income Tax formula
Tax payable = Tax on total income after deductions − TDS already deducted − Advance tax paid
Interest applies where advance tax instalments fall short.
How Income Tax works in practice
Estimate annual income early in the year so TDS is spread evenly instead of concentrated in the final quarter. Business income additionally involves advance tax instalments through the year.
Frequently asked questions
Compute both. The old regime usually wins with substantial HRA, home loan interest and deductions; otherwise the new regime often does.