Examples of your old & new tax regime FY 2020-21 (AY 2021-22)

Old vs New: A Comparison For Different Slabs

Taxpayers with annual income between RS.5 lakhs to Rs.10 lakhs are taxed at 20%, under the old regime. And in the new regime, they will be taxed at half that rate i.e. 10%. Also, those with an annual income of Rs.7.5 lakhs to Rs.10 lakhs will have to pay 15% income tax.

However, if the taxpayer is benefiting from exemptions and his net tax payable is less, he/she can choose to continue with the old tax regime.

OLD RATES (with exemptions)ANNUAL INCOMENEW RATE (without exemptions)
NilUp to Rs.2.5 lakhsNil
5%Rs.2.5 – 5 lakh5%
20%Rs.5 – 7.5 lakh10%
Rs. 7.5 – 10 lakh15%
30%Rs. 10-12.5 lakh20%
Rs. 12.5-15 lakh25%
Rs. 15 and above30%

Let’s take an example, a person’s annual income comes to Rs.6 lakhs. If he goes by the new rates, he will have to pay Rs.60,000. (some of the exemptions allowed in the new tax regime may be beneficial)

If he chooses the old rates, he can deduct Rs.1.5 lakhs under Sec 80C. His taxable income now is Rs.4.5 lakhs.  A simple preview of how much does the tax amount come to under different slabs with old and new tax regime will help you take the right call.

Before we begin, please note the following:-

  • The maximum amount of each of the exemptions is used here for calculation purposes.
  • Not everyone might invest in the same manner to save tax. If a person is not benefiting from the exemptions, he/she can choose the new regime.
  • The calculations made are for understanding purposes. Take advice from experts as the filing process for different assessment years may differ.
  • There are more exemptions an individual can benefit from, than the ones taken here for calculation.

For Annual Income Up To Rs.2.5 Lakhs 

  • No tax for Individuals, HUF below the age of 60 years.
  • For senior citizens, no tax up to Rs. 3,00,000.

Under old and the new scheme.

For Annual Income Up To Rs.5 Lakhs

  • For senior citizens: Rs.3,00,000 to Rs.500000 – 5%
  • Under Sec 87A, individuals with total income (after deductions) that do not exceed Rs.5 lakhs can claim a rebate of Rs.12,500.
Annual Income of Rs.5,00,000 (without exemption)
Old RegimeNew Regime
Income tax slabTax Rate (%)Tax (Rs.)Tax RateTax (Rs.)
Up to Rs. 2,50,0000000
250001 – 500000512500512500
(-) Rebate-12500-12500
Tax Payable00

For Annual Income Up To Rs 7.5 Lakhs

Annual Income of Rs.7,50,000 (without exemption)
Old RegimeNew Regime
Income tax slabTax RateTax (Rs.)Tax RateTax (Rs.)
Up to Rs. 2,50,0000000
250001 – 500000512500512500
500001 – 75000020500001025000
Sum6250037500
Health and Education cess4250041500
Tax Payable6500039000

 

Annual Income of Rs.7,50,000 (with exemption)
Annual Income750000
Exemptions u/s 80C-150000
u/s 80CCD(1B)-50000
u/s 80D-50000
HRA-10000
Taxable Income4,90,000
Old RegimeNew Regime
Income tax slabTax RateTax (Rs.)Tax RateTax (Rs.)
Up to Rs.2,50,0000000
250001 – 500000512500512500
500001 – 750000001025000
(-) Rebate-12500
Sum037500
health and education cess4041500
Tax Payable039000

For Annual Income Up To Rs.10 Lakhs

Annual Income of Rs.10,00,000 (without exemption)
Old RegimeNew Regime
Income tax slabTax RateTax (Rs.)Tax RateTax (Rs.)
Up to Rs.2,50,0000000
250001 – 500000512500512500
500001 – 75000020500001025000
750001 – 100000020500001537500
Sum11250075000
Health and education cess4450043000
Tax Payable1,17,00078,000

 

Annual Income of Rs.10,00,000 (with exemption)
Annual Income10,00,000
Exemptions u/s 80C-1,50,000
u/s 80CCD(1B)-50,000
u/s 80D-75,000
Taxable Income7,25,000
Old RegimeNew Regime
Income tax slabTax RateTax (Rs.)Tax RateTax (Rs.)
Up to Rs.2,50,0000000
250001 – 500000512500512500
500001 – 75000020500001025000
750001 – 1000000001537500
Sum6250075000
health and education cess4250043000
Tax Payable65,00078,000

For Annual Income Up to Rs 12.5 Lakhs

Annual Income of Rs.12,50,000 (without exemption)
Old RegimeNew Regime
Income tax slabTax RateTax (Rs.)Tax RateTax (Rs.)
Up to Rs.2,50,0000000
250001 – 500000512500512500
500001 – 75000020500001025000
750001 – 100000020500001537500
1000001 – 125000030750002050000
Sum187500125000
Health and education cess4750045000
195000
Annual Income of Rs.12,50,000 (with exemption)
Annual Income1250000
Exemptions u/s 80C-150000
u/s 80CCD(1B)-50000
u/s 80D-75000
Taxable Income-975000
Old RegimeNew Regime
Income tax slabTax RateTax (Rs.)Tax RateTax (Rs.)
Up to Rs.2,50,0000000
250001 – 500000512500512500
500001 – 75000020500001025000
750001 – 100000020500001537500
1000001 – 1250000002050000
Sum112500125000
Health and education cess4450045000
Tax Payable117000130000

For Annual Income Up To Rs 15 Lakhs

Annual Income of Rs.15,00,000 (without exemption)
Old RegimeNew Regime
Income tax slabTax RateTax (Rs.)Tax RateTax (Rs.)
Up to Rs.2,50,0000000
250001 – 500000512500512500
500001 – 75000020500001025000
750001 – 100000020500001537500
1000001 – 125000030750002050000
1250001 – 150000030750002562500
Sum262500187500
Health and education cess41050047500
273000195000

 

Annual Income of Rs.15,00,000 (with exemption)
Annual Income1500000
Exemptions u/s 80C-150000
u/s 80CCD(1B)-50000
u/s 80D-75000
Taxable Income-1225000
Old RegimeNew Regime
Income tax slabTax RateTax (Rs.)Tax RateTax (Rs.)
Up to Rs.2,50,0000000
250001 – 500000512500512500
500001 – 75000020500001025000
750001 – 100000020500001537500
1000001 – 125000030750002050000
1250001 – 1500000002562500
Sum187500187500
Health and education cess4750047500
Tax payable1,95,0001,95,000

 

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