Tax Planning
& Advisory

The answer depends entirely on the size and composition of your deductions. The general breakeven is approximately ₹3.75 lakh of total deductions — if your deductions exceed this under the Old Regime, it is likely cheaper. If they don't, the New Regime is typically better. However, surcharge differences, marginal relief provisions, and interaction with capital gains can shift the answer even for the same income level. TaxClue computes the exact tax payable under both regimes on your actual figures — including salary, capital gains, rental income, and all applicable deductions — and provides a written comparison before you decide. The regime selection in ITR-3 for business income has a one-year lock-in, making the analysis even more important for self-employed individuals.

For Long-Term Capital Gains on residential property, three exemption routes are available under the Income Tax Act: Section 54 — reinvest the LTCG amount in another residential property (purchase within 2 years, or construct within 3 years from sale). The gain is exempt up to the cost of the new property. Section 54EC — invest up to ₹50 lakh of LTCG in specified bonds (NHAI, REC, etc.) within 6 months of the sale. The invested amount is exempt from tax — bonds locked in for 5 years. Capital Gains Account Scheme (CGAS) — if the reinvestment cannot be made before the ITR filing date, deposit the gain in a CGAS account at any nationalised bank. This preserves the exemption while you arrange the actual reinvestment. The optimal route depends on your plans for the sale proceeds, the timeline, and your liquidity needs — TaxClue advises on which combination minimises tax before the sale is executed.

Under Section 44ADA, you declare 50% of ₹40 lakh = ₹20 lakh as income. You then apply applicable deductions (80C, 80D, NPS, etc.) to arrive at taxable income. The tax on ₹20 lakh (minus deductions) is typically very low. Under the regular method, you declare actual income minus actual professional expenses (office rent, staff, software, travel, etc.). If your actual expenses are significant and exceed 50% of receipts, the regular method would declare less than ₹20 lakh as income — making it worth the effort of maintaining books. For most consultants with minimal overhead expenses (home office, laptop, no staff), the presumptive 50% declaration is accurate or favourable — and saves the cost and effort of maintaining formal accounts. TaxClue analyses your actual expense structure before recommending which route produces lower tax and lower compliance cost.

Missing or under-paying advance tax attracts interest at 1% per month under two sections: Sec 234C — levied on each instalment shortfall (June, September, December, March). If you paid only 10% by 15 June when 15% was due, you pay 1% per month for 3 months on the shortfall. Sec 234B — levied if total advance tax + TDS paid by 31 March is less than 90% of the total tax liability. Interest runs from 1 April until the date of assessment. On a tax liability of ₹5 lakh, a 4-month gap means ₹20,000 of interest under 234B alone. TaxClue's advance tax service eliminates this by computing and tracking all four instalments — and sending payment reminders before each due date.

This requires a precise analysis of your company's tax situation and your personal income. Salary: Deductible in the company (reduces company tax at 22–25%), but taxable in your hands at slab rates (up to 30% + surcharge). The combined effective tax on a ₹50L salary is: company saves ~₹11L tax (at 22%) but you pay ~₹13.5L personal tax — net cost ~₹2.5L. Dividend: Not deductible in the company (company pays 22% tax on the profit first), and then taxable in your hands at slab rate. At 30% personal rate, dividend is double-taxed — first at 22% in the company, then at 30% in your hands. Generally, salary is more efficient when your personal slab rate is below 30%. A mixed strategy — pay enough salary to reach the top of the 20% slab (₹10–15L), and keep the rest in the company for reinvestment — is often optimal. TaxClue models the exact post-tax cash in hand under each scenario with specific numbers.