Calculating net taxable income in the new tax regime is the process of determining the taxable income after deducting eligible deductions and exemptions. For instance, if an individual’s gross income is 500,000 and they have eligible deductions of 100,000, their net taxable income would be 400,000.
Understanding how to calculate net taxable income under the new tax regime is significant for individuals and businesses as it helps determine their tax liability accurately. The new tax regime offers simplified tax slabs and reduced rates, potentially leading to lower tax outgo. It was introduced in India in 2020, providing an alternative to the old tax regime.