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 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

 

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