We know the budget finance bill 2022 was presented on 1st February 2022.
In this budget no changes was made in income tax slabs for individuals and it remains as below:
| Old Regime | New Regime | |
| Assessment Year | 2023-24 | 2023-24 |
| Basic Exemption upto Rs | Rs 2,50,000 | Rs 2,50,000 |
| Tax @ 5% | Rs 2.50 lac to 5 Lacs | Rs 2.50 lac to 5 Lacs |
| Tax @ 10% | Not Applicable | Rs 5 lac to 7.5 Lacs |
| Tax @ 15% | Not Applicable | Rs 7.5 lac to 10 Lacs |
| Tax @ 20% | Rs 5 Lac to 10 Lacs | Rs 10 lac to 12.50 Lacs |
| Tax @ 25% | Not Applicable | Rs 12.50 lac to 15 Lacs |
| Tax @ 30% | in Excess of Rs 10 Lacs | in Excess of Rs 15 Lacs |
| Surcharge | @10% if Total Income > 50 Lacs but <=1 Crore @ 15% If Total Income > Rs 1 Crore but <= Rs 2 crore, @ 25% If Total Income > Rs 2 Crore but <= Rs 5 crore, @ 37% If Total Income > Rs 5 Crore |
@10% if Total Income > 50 Lacs but <=1 Crore @ 15% If Total Income > Rs 1 Crore but <= Rs 2 crore, @ 25% If Total Income > Rs 2 Crore but <= Rs 5 crore, @ 37% If Total Income > Rs 5 Crore |
| Health and Education Cess | @ 4% | @ 4% |
| Deduction u/s 87A | Lower of (Rs 12,500 or actual tax payable) for Individual having Total Income <= Rs 5 Lacs | Lower of (Rs 12,500 or actual tax payable) for Individual having Total Income <= Rs 5 Lacs |
Often people find it very confusing to decide whether to opt for old tax regime or new tax regime (w.e.f FY 2020-21). The same questions is asked by the employer to their employees.
In the attached tax calculator help sheet is given which will assist a person to decide whether to opt for old tax regime or new tax regime at the time of opting with employer or filing return.
The only limitation with new tax regime is that though a person (other than having business or profession income) can opt for the same in each financial year, however a person having income from business or profession can opt only once in the life time. If he opts for new regime in a financial year (say FY 2020-21) but does not opt for new regime in any other financial year (say 2021-22) then in the lifetime he can’t opt for new regime again.
Above provision for new tax regime is summarized below:
| Particulars | Salaried or other person (Not having Income from business or profession) | Individual having Income from business or profession |
| Declaration to employer | He can declare his choice of old or new regime of taxation to employer. However he can change his mind at the time of filing return (i.e he declared old regime to employer, however can file return under new regime at the time of filing return) | Not applicable |
| Selection of regime in each financial year | He can select old or new regime in each financial year. For example in FY 2020-21 he can choose new regime of taxation and in FY 2021-22 he may chose old regime and again in FY 2022-23 can choose either of the regime. | He can select new regime in any financial year. However once chosen new regime and then shifted to old regime then in the life time he can not opt for new regime again. For example: If he opts for new regime in a financial year (say FY 2020-21) but does not opt for new regime in any other financial year (say 2021-22) then in the lifetime he can’t opt for new regime again. |
The attached tax calculator is a very useful tool to calculate tax by using excel only (i.e can be used offline as well). It contains the rate of Income tax for last 26 financial year (i.e Financial year 1997-98 to 2022-23) and income tax calculator for last 17 years (i.e Financial year 2006-07 to 2022-23) for Individuals (i.e including the rates proposed under finance Bill 2022)
This also contains comparison between tax liability between old and new scheme as introduced w.e.f FY 2020-21.
As mentioned earlier the attached sheet also contains help document to calculate income under old and new regime and thereby helps in comparing tax under old and new regime and file return accordingly.
Hope users will find this useful.
Author Bio
Very usefull
very good
Thanks