CBDT’s Tax Comparison Tool: A Smart Way to Evaluate Your Tax Liabilities
The Central Board of Direct Taxes (CBDT) has introduced a Tax Comparison Tool under the Finance Bill 2025, designed to assist taxpayers in understanding potential changes in their tax liabilities. This tool offers a detailed comparison of total tax payable under the existing rates for FY 2024-25 and the proposed rates for FY 2025-26, including surcharges and cess.
This initiative aims to provide clarity on how the new tax regime compares to the old, allowing taxpayers to make informed financial decisions.
How Does the CBDT Tax Comparison Tool Work?
The tool provides a side-by-side tax calculation for both residents and non-residents, considering:
- Basic Tax Slabs under both tax regimes
- Surcharges & Cess applicable for different income groups
- Net tax savings analysis based on income level
- Impact of deductions & exemptions available in the old regime vs. the new regime
Key Features:
- User-Friendly Interface – Quick and easy input fields to estimate tax liability.
- Comparative Insights – View potential savings under each regime.
- Advisory Note – Clarifies that the tool reflects prevailing tax laws and may not cover all individual scenarios.
- Disclaimer – Recommends verifying tax positions based on official tax provisions before making financial decisions.
New Tax Regime vs. Old: Which One Should You Choose?
With the latest amendments in the Finance Bill 2025, taxpayers must evaluate their options carefully. Here’s a quick comparison:
| Aspect | Old Tax Regime | New Tax Regime |
|---|---|---|
| Standard Deductions | Available for salaried individuals | Available (with revised limits) |
| Exemptions | Includes HRA, LTA, 80C, etc. | Limited or removed |
| Tax Rates | Higher, but deductions reduce taxable income | Lower, but no major exemptions |
| Suitability | Best for those availing deductions | Best for those preferring lower tax rates without exemptions |
Who Can Benefit from This Tool?
- Business Owners & Freelancers – Compare how the new regime affects self-employed taxation.
- Salaried Individuals – Evaluate potential savings before opting for a regime.
- Financial Advisors – Guide clients with an accurate tax estimation.
- NRIs & Expat Taxpayers – Understand tax differences based on residency status.
Final Thoughts: With tax laws evolving under Finance Bill 2025, taxpayers should use available tools like the CBDT Tax Comparison Calculator to ensure informed decisions and maximize tax savings.