Help me choose Income tax regime

• The new tax regime results in lower tax liability but doesn't allow deductions (other than the standard deduction).
• The old tax regime can be favorable if you avail deductions like HRA, Section 80C, and others.

TaxWiser said:

The calculations below are indicative and assume no additional exemptions, deductions, or investments beyond the standard deduction of ₹75,000. Final tax liability may vary depending on factors such as eligible deductions (like HRA, Section 80C, 80D, etc.), exemptions, or other personal considerations. Please consult a tax advisor or use a detailed tax calculator for precise figures.

Category​

New Tax Regime ​

Old Tax Regime​

Taxable Income Slab ​

₹0 - ₹4 lakh: No tax ₹4 - ₹8 lakh: 5% ₹8 - ₹12 lakh: 10% ₹12 - ₹16 lakh: 15% ₹16 - ₹20 lakh: 20%

₹0 - ₹2.5 lakh: No tax ₹2.5 lakh - ₹5 lakh: 5% ₹5 lakh - ₹10 lakh: 20% ₹10 lakh and above: 30%

Tax Breakdown​

₹4 lakh - ₹8 lakh: ₹4 lakh × 5% = ₹20,000 ₹8 lakh - ₹12 lakh: ₹4 lakh × 10% = ₹40,000 ₹12 lakh - ₹16 lakh: ₹4 lakh × 15% = ₹60,000 ₹16 lakh - ₹19.29 lakh: ₹3.29 lakh × 20% = ₹65,800

₹2.5 lakh - ₹5 lakh: ₹2.5 lakh × 5% = ₹12,500 ₹5 lakh - ₹10 lakh: ₹5 lakh × 20% = ₹1,00,000 ₹10 lakh - ₹19.29 lakh: ₹9.29 lakh × 30% = ₹2,78,700

Total Tax​

₹1,85,800

₹3,91,200

Standard Deduction​

₹75,000

₹75,000

Final Tax Liability ​

₹1,10,800

₹3,16,200

Summary:

• The new tax regime results in lower tax liability but doesn't allow deductions (other than the standard deduction).
• The old tax regime can be favorable if you avail deductions like HRA, Section 80C, and others.

(Source: Conversation with Gemini AI)

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amitvicky said:

For the same figures, if we consider 1.5L investment to PPF and 50K contribution to NPS, 50k insurance premium for the whole family (1 parent, 2 couple, 2 kids) how much would be the tax in old regime?

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TaxWiser said:

Under the old tax regime, your taxable income can be reduced significantly by leveraging deductions for investments in PPF, NPS, and insurance premiums. Here's the calculation:

​

■ Gross Salary: ₹19,29,000.​

​

■ Standard Deduction: ₹50,000.​

• Taxable Income: ₹19,29,000 - ₹50,000 = ₹18,79,000.

■ Deductions:​

• Section 80C: ₹1,50,000 for PPF investment.
• Section 80CCD(1B): ₹50,000 for NPS contribution.
• Section 80D: ₹50,000 for health insurance premium (family + senior parent).
• Total Deductions: ₹1,50,000 + ₹50,000 + ₹50,000 = ₹2,50,000.

■ Net Taxable Income: ₹18,79,000 - ₹2,50,000 = ₹16,29,000.​

■ Tax Slabs:​

• ₹0 - ₹2,50,000: No tax.
• ₹2,50,001 - ₹5,00,000: 5% = ₹12,500.
• ₹5,00,001 - ₹10,00,000: 20% = ₹1,00,000.
• ₹10,00,001 - ₹16,29,000: 30% = ₹1,88,700.

■ Total Tax: ₹12,500 + ₹1,00,000 + ₹1,88,700 = ₹3,01,200.​

​

(Source: ClearTax)

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