Under New Tax Regime
|
Case I - Salaried individual those who are not claiming any exemptions or deductions |
Amount (Rs.) |
||||
|
Gross salary |
750,000 |
1,000,000 |
1,250,000 |
1,500,000 |
2,000,000 |
|
Tax |
|||||
|
Rs.2,50,001-5,00,000 5% |
12,500 |
12,500 |
12,500 |
12,500 |
12,500 |
|
Rs.5,00,001-7,50,000 10% |
25,000 |
25,000 |
25,000 |
25,000 |
25,000 |
|
Rs.7,50,001-10,00,000 15% |
37,500 |
37,500 |
37,500 |
37,500 |
|
|
Rs.10,00,001-12,50,0000 20% |
50,000 |
50,000 |
50,000 |
||
|
Rs.12,50,001-15,00,000 25% |
62,500 |
62,500 |
|||
|
Rs.15,00,001-20,00,000 30% |
150,000 |
||||
|
Tax Payable |
37,500 |
75,000 |
125,000 |
187,500 |
337,500 |
|
Health Education Cess 4% |
1,500 |
3,000 |
5,000 |
7,500 |
13,500 |
|
Total Tax Payable |
39,000 |
78,000 |
130,000 |
195,000 |
337,500 |
Existing Tax Regime
|
Case I - Salaried individual those who are not claiming any exemptions or deductions |
Amount (Rs.) |
||||
|
Gross salary |
750,000 |
1,000,000 |
1,250,000 |
1,500,000 |
2,000,000 |
|
Tax |
|||||
|
Rs 2,50,001-5,00,000 5 % |
12,500 |
12,500 |
12,500 |
12,500 |
12,500 |
|
Rs.5,00,001-10,00,000 20% |
50,000 |
100,000 |
100,000 |
100,000 |
100,000 |
|
Rs.10,00,001-and above 30% |
75,000 |
150,000 |
300,000 |
||
|
Tax Payable |
62,500 |
112,500 |
187,500 |
262,500 |
412,500 |
|
Health Education Cess 4% |
2,500 |
4,500 |
7,500 |
10,500 |
16,500 |
|
Total Tax Payable |
65,000 |
117,000 |
195,000 |
273,000 |
412,500 |
|
Excess Tax in new Regime |
(26,000) |
(39,000) |
(65,000) |
(78,000) |
(75,000) |
|
Case II - Salaried individual claiming only deductions or exemptions. under sections 80C, 80D and standard deduction |
Amount (Rs.) |
||||||||||
|
Gross salary |
750,000 |
1,000,000 |
1,250,000 |
1,500,000 |
2,000,000 |
||||||
|
Less: Standard Deduction |
50,000 |
50,000 |
50,000 |
50,000 |
50,000 |
||||||
|
Total Income |
700,000 |
950,000 |
1,200,000 |
1,450,000 |
1,950,000 |
||||||
|
Less: 80C |
150,000 |
150,000 |
150,000 |
150,000 |
150,000 |
||||||
|
80D |
25,000 |
25,000 |
25,000 |
25,000 |
25,000 |
||||||
|
Net Total Income |
525,000 |
775,000 |
1,025,000 |
1,275,000 |
1,775,000 |
||||||
|
Tax on Total Income |
17,500 |
67,500 |
120,000 |
195,000 |
345,000 |
||||||
|
Health Education Cess 4% |
700 |
2,700 |
4,800 |
7,800 |
13,800 |
||||||
|
Total Tax Payable |
18,200 |
70,200 |
124,800 |
202,800 |
358,800 |
||||||
|
Excess Tax in new Regime |
20,800 |
7,800 |
5,200 |
(7,800) |
(21,300) |
||||||
|
Case III- Salaried individual claiming more exemptions/deduction, i.e. under sections 80C, 80D, standard deduction and HRA exemption |
Amount (Rs.) |
||||||||||
|
Gross salary |
750,000 |
1,000,000 |
1,250,000 |
1,500,000 |
2,000,000 |
||||||
|
Less: HRA |
150,000 |
200,000 |
250,000 |
300,000 |
350,000 |
||||||
|
Less: Standard Deduction |
50,000 |
50,000 |
50,000 |
50,000 |
50,000 |
||||||
|
Total Income |
550,000 |
750,000 |
950,000 |
1,150,000 |
1,600,000 |
||||||
|
Less: 80C |
150,000 |
150,000 |
150,000 |
150,000 |
150,000 |
||||||
|
80D |
25,000 |
25,000 |
25,000 |
25,000 |
25,000 |
||||||
|
Net Total Income |
375,000 |
575,000 |
775,000 |
975,000 |
1,425,000 |
||||||
|
Tax on Total Income |
6,250 |
27,500 |
67,500 |
107,500 |
240,000 |
||||||
|
Rebate U/S 87A (For income upto Rs 5 lakhs Tax Rebate upto Rs 12,500) |
6,250 |
||||||||||
|
Health Education Cess 4% |
- |
1,100 |
2,700 |
4,300 |
9,600 |
||||||
|
Total Tax Payable |
- |
28,600 |
70,200 |
111,800 |
249,600 |
||||||
|
Excess Tax in new Regime |
39,000 |
49,400 |
59,800 |
83,200 |
87,900 |
||||||
Note:
1. If the salaried employee is claiming deductions under section 80C, 80D (medical premium), HRA exemption, LTA exemption and deduction of interest paid on housing loan taken for self occupied property up to permissible limits, he is likely to be better off in the existing personal tax regime. A high earner claiming only these deductions is likely to save tax under the new regime but lower income earners up to gross salary of Rs 12.5 lakh will end up paying more tax. To see if the new regime is beneficial, each individual will have to make their own comparative calculations. It will depend on the level of deductions and exemptions you are claiming at the moment.
2. This new tax regime is the option to those people who are unable to avail exemptions or deductions. Those who are new in job,one who has not yet planned to buy a house, he might be putting little money in PF (provident fund) and insurance. He may find that, depending on his income, this new scheme is better.
3. A person can freely opt in scheme and opt out of the scheme. The tax Rates will be applicable as per the Option exercised at the time of filing of Return every year. Income Tax Return has to be filed by Due Date. If ITR is late, then Tax payable at Normal rate.
The author is a member of the CPA Institute, Australia and member of Institute of Chartered Accountants of India and can also be reached at casusmitadutta@gmail.com.
Disclaimer: The facts and opinions written in this column are those of the author and have been prepared on the basis of relevant provisions and information available at the time of preparation. The article does not constitute any professional advice or a formal recommendation. The author has undertaken the utmost care to disseminate true and correct views and does not accept liability of any errors or omissions.
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