Old v/s New Income Tax Slabs
Slab Rates:
|
Annual Income |
Old Tax Rate |
New Tax rate |
|
Up to Rs. 2.5 Lakhs |
NIL |
NIL |
|
Rs. 2.5 Lakhs to 5 Lakhs |
5% |
5% |
|
Rs. 5 Lakhs to 7.5 Lakhs |
20% |
10% |
|
Rs. 7.5 Lakhs to 10 Lakhs |
20% |
15% |
|
Rs. 10 Lakhs to 12.5 Lakhs |
30% |
20% |
|
Rs. 12.5 Lakhs to 15 Lakhs |
30% |
25% |
|
Above Rs. 15 Lakhs |
30% |
30% |
Note: The new Tax Regime (Section 115BAC) is available only for Individuals and Hindu Undivided Families only if they conform to certain conditions which you can find here.
Let us understand how the total tax payable would be different in both the cases through an example:
Deductions considered:
1. Rs. 1,50,000 u/s 80C
2. Rs. 50,000 standard deduction
|
Net Income |
Taxable Income |
*Tax Payable |
||
|
New Regime |
Old Regime |
New Regime |
Old Regime |
|
|
8 Lakhs |
8,00,000 |
6,00,000 |
46,800 |
33,800 |
|
20 Lakhs |
20,00,000 |
18,00,000 |
3,51,000 |
3,66,600 |
*There is an additional 4% health and education cess charged.
There is no set formula to decide between the two regimes. One must calculate the tax payable as per both new and old rates before deciding whether to opt for the new regime or not.