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 INCOME | NEW RATE (without exemptions) |
Nil | Up to Rs.2.5 lakhs | Nil |
5% | Rs.2.5 – 5 lakh | 5% |
20% | Rs.5 – 7.5 lakh | 10% |
Rs. 7.5 – 10 lakh | 15% | |
30% | Rs. 10-12.5 lakh | 20% |
Rs. 12.5-15 lakh | 25% | |
Rs. 15 and above | 30% |
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 Regime | New Regime | |||
Income tax slab | Tax Rate (%) | Tax (Rs.) | Tax Rate | Tax (Rs.) |
Up to Rs. 2,50,000 | 0 | 0 | 0 | 0 |
250001 – 500000 | 5 | 12500 | 5 | 12500 |
(-) Rebate | -12500 | -12500 | ||
Tax Payable | 0 | 0 |
For Annual Income Up To Rs 7.5 Lakhs
Annual Income of Rs.7,50,000 (without exemption) | ||||
Old Regime | New Regime | |||
Income tax slab | Tax Rate | Tax (Rs.) | Tax Rate | Tax (Rs.) |
Up to Rs. 2,50,000 | 0 | 0 | 0 | 0 |
250001 – 500000 | 5 | 12500 | 5 | 12500 |
500001 – 750000 | 20 | 50000 | 10 | 25000 |
Sum | 62500 | 37500 | ||
Health and Education cess | 4 | 2500 | 4 | 1500 |
Tax Payable | 65000 | 39000 |
Annual Income of Rs.7,50,000 (with exemption) | ||||
Annual Income | 750000 | |||
Exemptions u/s 80C | -150000 | |||
u/s 80CCD(1B) | -50000 | |||
u/s 80D | -50000 | |||
HRA | -10000 | |||
Taxable Income | 4,90,000 | |||
Old Regime | New Regime | |||
Income tax slab | Tax Rate | Tax (Rs.) | Tax Rate | Tax (Rs.) |
Up to Rs.2,50,000 | 0 | 0 | 0 | 0 |
250001 – 500000 | 5 | 12500 | 5 | 12500 |
500001 – 750000 | 0 | 0 | 10 | 25000 |
(-) Rebate | -12500 | |||
Sum | 0 | 37500 | ||
health and education cess | 4 | 0 | 4 | 1500 |
Tax Payable | 0 | 39000 |
For Annual Income Up To Rs.10 Lakhs
Annual Income of Rs.10,00,000 (without exemption) | ||||
Old Regime | New Regime | |||
Income tax slab | Tax Rate | Tax (Rs.) | Tax Rate | Tax (Rs.) |
Up to Rs.2,50,000 | 0 | 0 | 0 | 0 |
250001 – 500000 | 5 | 12500 | 5 | 12500 |
500001 – 750000 | 20 | 50000 | 10 | 25000 |
750001 – 1000000 | 20 | 50000 | 15 | 37500 |
Sum | 112500 | 75000 | ||
Health and education cess | 4 | 4500 | 4 | 3000 |
Tax Payable | 1,17,000 | 78,000 |
Annual Income of Rs.10,00,000 (with exemption) | ||||
Annual Income | 10,00,000 | |||
Exemptions u/s 80C | -1,50,000 | |||
u/s 80CCD(1B) | -50,000 | |||
u/s 80D | -75,000 | |||
Taxable Income | 7,25,000 | |||
Old Regime | New Regime | |||
Income tax slab | Tax Rate | Tax (Rs.) | Tax Rate | Tax (Rs.) |
Up to Rs.2,50,000 | 0 | 0 | 0 | 0 |
250001 – 500000 | 5 | 12500 | 5 | 12500 |
500001 – 750000 | 20 | 50000 | 10 | 25000 |
750001 – 1000000 | 0 | 0 | 15 | 37500 |
Sum | 62500 | 75000 | ||
health and education cess | 4 | 2500 | 4 | 3000 |
Tax Payable | 65,000 | 78,000 |
For Annual Income Up to Rs 12.5 Lakhs
Annual Income of Rs.12,50,000 (without exemption) | ||||
Old Regime | New Regime | |||
Income tax slab | Tax Rate | Tax (Rs.) | Tax Rate | Tax (Rs.) |
Up to Rs.2,50,000 | 0 | 0 | 0 | 0 |
250001 – 500000 | 5 | 12500 | 5 | 12500 |
500001 – 750000 | 20 | 50000 | 10 | 25000 |
750001 – 1000000 | 20 | 50000 | 15 | 37500 |
1000001 – 1250000 | 30 | 75000 | 20 | 50000 |
Sum | 187500 | 125000 | ||
Health and education cess | 4 | 7500 | 4 | 5000 |
195000 |
Annual Income of Rs.12,50,000 (with exemption) | ||||
Annual Income | 1250000 | |||
Exemptions u/s 80C | -150000 | |||
u/s 80CCD(1B) | -50000 | |||
u/s 80D | -75000 | |||
Taxable Income | -975000 | |||
Old Regime | New Regime | |||
Income tax slab | Tax Rate | Tax (Rs.) | Tax Rate | Tax (Rs.) |
Up to Rs.2,50,000 | 0 | 0 | 0 | 0 |
250001 – 500000 | 5 | 12500 | 5 | 12500 |
500001 – 750000 | 20 | 50000 | 10 | 25000 |
750001 – 1000000 | 20 | 50000 | 15 | 37500 |
1000001 – 1250000 | 0 | 0 | 20 | 50000 |
Sum | 112500 | 125000 | ||
Health and education cess | 4 | 4500 | 4 | 5000 |
Tax Payable | 117000 | 130000 |
For Annual Income Up To Rs 15 Lakhs
Annual Income of Rs.15,00,000 (without exemption) | ||||
Old Regime | New Regime | |||
Income tax slab | Tax Rate | Tax (Rs.) | Tax Rate | Tax (Rs.) |
Up to Rs.2,50,000 | 0 | 0 | 0 | 0 |
250001 – 500000 | 5 | 12500 | 5 | 12500 |
500001 – 750000 | 20 | 50000 | 10 | 25000 |
750001 – 1000000 | 20 | 50000 | 15 | 37500 |
1000001 – 1250000 | 30 | 75000 | 20 | 50000 |
1250001 – 1500000 | 30 | 75000 | 25 | 62500 |
Sum | 262500 | 187500 | ||
Health and education cess | 4 | 10500 | 4 | 7500 |
273000 | 195000 |
Annual Income of Rs.15,00,000 (with exemption) | ||||
Annual Income | 1500000 | |||
Exemptions u/s 80C | -150000 | |||
u/s 80CCD(1B) | -50000 | |||
u/s 80D | -75000 | |||
Taxable Income | -1225000 | |||
Old Regime | New Regime | |||
Income tax slab | Tax Rate | Tax (Rs.) | Tax Rate | Tax (Rs.) |
Up to Rs.2,50,000 | 0 | 0 | 0 | 0 |
250001 – 500000 | 5 | 12500 | 5 | 12500 |
500001 – 750000 | 20 | 50000 | 10 | 25000 |
750001 – 1000000 | 20 | 50000 | 15 | 37500 |
1000001 – 1250000 | 30 | 75000 | 20 | 50000 |
1250001 – 1500000 | 0 | 0 | 25 | 62500 |
Sum | 187500 | 187500 | ||
Health and education cess | 4 | 7500 | 4 | 7500 |
Tax payable | 1,95,000 | 1,95,000 |