TDS on salary below 5 lakhs and Tax slabs

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Prapti (Querist)
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24 January 2024 My annual salary is 5 lakhs yet my employer deducts TDS since my salary goes beyond 3 lakhs. Can anyone guide on this. As per my knowledge if i am opting for new regime i shall not liable for any tax.
2nd what are the tax slabs for new regime? since Income Tax website shows as below for new regime as well.
Up to ₹ 2,50,000- nil
2,50,001 - ₹ 5,00,000- 5%
5,00,001 - ₹ 7,50,000- 10%
7,50,001 - ₹ 10,00,000- 15% and so on.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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11 July 2024 Based on the information you provided, let's address your queries regarding TDS deductions and the tax slabs under the new tax regime in India:

### TDS Deduction on Salary:

1. **TDS Deduction by Employer:**
- Employers are required to deduct TDS (Tax Deducted at Source) on salaries paid to employees based on their projected total income for the financial year.
- TDS is deducted according to the income tax slabs applicable to the employee's estimated total income, which includes salary, income from other sources, etc.
- If your employer deducts TDS from your salary, it means they are following the tax rules applicable to your income bracket.

2. **Opting for the New Tax Regime:**
- The new tax regime introduced in Budget 2020 provides reduced income tax rates but without certain deductions and exemptions that are available under the old regime.
- Under the new tax regime, you can opt for lower tax rates without claiming deductions such as HRA, LTA, standard deduction, etc.
- If you opt for the new tax regime, you won't get tax benefits such as deductions under Section 80C, 80D, etc., but you will be subject to lower tax rates.

### Tax Slabs for New Regime:

These tax rates are applicable if you choose the new tax regime and do not claim any deductions or exemptions.

### Conclusion:

- **TDS Deduction:** Your employer deducts TDS based on the tax laws applicable to your estimated total income, including salary and other income.
- **New Tax Regime:** If you opt for the new tax regime, you can avail lower tax rates without claiming deductions, which simplifies tax calculation but reduces the scope for tax-saving investments.

To ensure accurate tax compliance and optimal tax planning, especially regarding the choice between the old and new tax regimes, it's advisable to consult with a tax advisor or a chartered accountant who can provide personalized guidance based on your specific financial situation and goals.

If you have further questions or need clarification on any aspect, feel free to ask!