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Let us understand the Old Vs. New Tax regimes for FY 2023-24. In this article, we will discuss taxability under both new vs. old Income Tax regimes after considering revised Income Tax slabs proposed by Finance minister in Union Budget 2023-24 as applicable for Assessment Year 2024-25 i.e., Financial Year 2023-24. Author has analyzed different income situations and and as per those situations which tax regime is better to opt is been explained with the help of practical examples.

Proposed Tax Slabs for FY 2023-24 under new vs. old Income Tax regimes

New Tax Regime Rate Old Tax Regime Rate
Rs 0 to Rs 3 lakh 0% Rs 0 to Rs 2.5 lakh 0%
Rs 3 lakh to 6 lakh 5% Rs 2.5 lakh to 5 lakh 5%
Rs 6 lakh to 9 lakh 10% Rs 5 lakh to 10 lakh 20%
Rs 9 lakh to Rs 12 lakh 15% Above Rs 30 lakh 30%
Rs 12 lakh to Rs 15 lakh 20%
Above Rs 15 lakh 30%

Let’s discuss taxability in both Tax regimes with some situations, these are some examples and can be more with different scenarios of income and investments.

Situation 1: If your Income is below ₹ 7 lakh or Up to 7 lakh in a FY 2023-24

New Tax Regime Rate  Amount Old Tax Regime Rate  Amount
Rs 0 to Rs 3 lakh 0%  NIL Rs 0 to Rs 2.5 lakh 0%  NIL
Rs 3 lakh to 6 lakh 5%  15,000 Rs 2.5 lakh to 5 lakh 5%  12,500
Rs 6 lakh to 7 lakh 10%  10,000 Rs 5 lakh to 10 lakh 20%  1,00,000
Total Tax payable  25,000 Total Tax payable  1,12,500
Less: Rebate U/s 87A  25,000 Less: Rebate U/s 87A  –
Tax Payable  – Tax Payable  1,12,500

Conclusion: If Income is less than or up to 7 lacs, better to go with the New Tax regime.

Situation 2: If your Income is 9 lakh in a FY 2023-24

New Tax Regime Rate  Amount Old Tax Regime Rate  Amount
Rs 0 to Rs 3 lakh 0%  NIL Rs 0 to Rs 2.5 lakh 0%  NIL
Rs 3 lakh to 6 lakh 5%  15,000 Rs 2.5 lakh to 5 lakh 5%  12,500
Rs 6 lakh to 9 lakh 10%  30,000 Rs 5 lakh to 9 lakh 20%  80,000
Total Tax payable  45,000 Total Tax payable  92,500
Less: Rebate U/s 87A (rebate is available for Income upto 7 lacs only, No rebate to individuals having income more than 7 lacs)  – Less: Rebate U/s 87A  –
Tax Payable  45,000 Tax Payable  92,500

Conclusion: If Income is upto 9 lacs, then also better to go with New Tax regime.

Situation 3: If your salary Income is 9 lakh in a FY 2023-24, and have deductions under Section 80C-1.5 lacs and 80D- 25000

Gross Income  9,00,000 Gross Income  9,00,000
Less: Std. Deductions  50,000 Less: Std. Deductions  50,000
Net Income  8,50,000 Net Income  8,50,000
Les: 80C (Not allowed under New Regime)  – Les: 80C  1,50,000
Les: 80D (Not allowed under New Regime)  – Les: 80D  25,000
Net Income  8,50,000 Net Income  6,75,000
New Tax Regime Rate  Amount Old Tax Regime Rate  Amount
Rs 0 to Rs 3 lakh 0%  NIL Rs 0 to Rs 2.5 lakh 0%  NIL
Rs 3 lakh to 6 lakh 5%  15,000 Rs 2.5 lakh to 5 lakh 5%  12,500
Rs 6 lakh to 8.5 lakh 10%  25,000 Rs 5 lakh to 6.75 lakh 20%  35,000
Total Tax payable  40,000 Total Tax payable  47,500
Less: Rebate U/s 87A (rebate is available for Income upto 7 lacs only, No rebate to individuals having income more than 7 lacs)  – Less: Rebate U/s 87A  –
Tax Payable  40,000 Tax Payable  47,500

Conclusion: If Income is upto 9 lacs, then also better to go with New Tax regime.

Note: Standard deduction is available to salaried employees only

Situation 4: If your Income other than salary is 9 lakhs in a FY 2023-24, and have deductions under Section 80C-1.5 lacs and 80D- 25000

 

Gross Income

 9,00,000 Gross Income  9,00,000
Les: 80C (Not allowed under New Regime)  – Les: 80C  1,50,000
Les: 80D (Not allowed under New Regime)  – Les: 80D  25,000
Net Income  9,00,000 Net Income  7,25,000
New Tax Regime Rate  Amount Old Tax Regime Rate  Amount
Rs 0 to Rs 3 lakh 0%  NIL Rs 0 to Rs 2.5 lakh 0%  NIL
Rs 3 lakh to 6 lakh 5%  15,000 Rs 2.5 lakh to 5 lakh 5%  12,500
Rs 6 lakh to 9 lakh 10%  30,000 Rs 5 lakh to 7.25 lakh 20%  45,000
Total Tax payable  45,000 Total Tax payable  57,500
Less: Rebate U/s 87A (rebate is available for Income upto 7 lacs only, No rebate to individuals having income more than 7 lacs)  – Less: Rebate U/s 87A  –
Tax Payable  45,000 Tax Payable  57,500

Conclusion: If Income is upto 9 lacs, then also better to go with New Tax regime.

Situation 5: If a person is having home loan and paying interest on loan more than 2 lacs and Income other than salary is 9 lakh in a FY 2023-24, and have deductions under Section 80C-1.5 lacs and 80D- 25000

Gross Income  9,00,000 Gross Income  9,00,000
Les: 80C (Not allowed under New Regime)  – Les: 80C  1,50,000
Les: 80D (Not allowed under New Regime)  – Les: 80D  25,000
Les: 80EE  50,000
Net Income  9,00,000 Net Income  6,75,000
New Tax Regime Rate  Amount Old Tax Regime Rate  Amount
Rs 0 to Rs 3 lakh 0%  NIL Rs 0 to Rs 2.5 lakh 0%  NIL
Rs 3 lakh to 6 lakh 5%  15,000 Rs 2.5 lakh to 5 lakh 5%  12,500
Rs 6 lakh to 9 lakh 10%  30,000 Rs 5 lakh to 6.75 lakh 20%  35,000
Total Tax payable  45,000 Total Tax payable  47,500
Less: Rebate U/s 87A (rebate is available for Income upto 7 lacs only, No rebate to individuals having income more than 7 lacs)  – Less: Rebate U/s 87A  –
Tax Payable  45,000 Tax Payable  47,500

Conclusion: If Income is upto 9 lacs, then also better to go with New Tax regime.

Situation 6: If your Income is 12 lakh in a FY 2023-24, and have deductions under Section 80C-1.5 lacs and 80D- 25000

Gross Income  12,00,000 Gross Income  12,00,000
Les: 80C (Not allowed under New Regime)  – Les: 80C  1,50,000
Les: 80D (Not allowed under New Regime)  – Les: 80D  25,000
Net Income  12,00,000 Net Income  10,25,000
New Tax Regime Rate  Amount Old Tax Regime Rate  Amount
Rs 0 to Rs 3 lakh 0%  NIL Rs 0 to Rs 2.5 lakh 0%  NIL
Rs 3 lakh to 6 lakh 5%  15,000 Rs 2.5 lakh to 5 lakh 5%  12,500
Rs 6 lakh to 9 lakh 10%  30,000 Rs 5 lakh to 10 lakh 20%  1,00,000
Rs 9 lakh to 12 lakh 15%  45,000 Rs 10 lakh to 10.25 lakh 30%  7,500
Total Tax payable  90,000 Total Tax payable  1,20,000
Less: Rebate U/s 87A (rebate is available for Income upto 7 lacs only, No rebate to individuals having income more than 7 lacs)  – Less: Rebate U/s 87A  –
Tax Payable  90,000 Tax Payable  1,20,000

Conclusion: If income is more than 9 lacs then it is preferrable to go with old regime

Situation 7: If your Income is 15 lakhs in a FY 2023-24, and have deductions under Section 80C-1.5 lacs and 80D- 25000

Gross Income  15,00,000 Gross Income  15,00,000
Les: 80C (Not allowed under New Regime)  – Les: 80C  1,50,000
Les: 80D (Not allowed under New Regime)  – Les: 80D  25,000
Net Income  15,00,000 Net Income  13,25,000
New Tax Regime Rate  Amount Old Tax Regime Rate  Amount
Rs 0 to Rs 3 lakh 0%  NIL Rs 0 to Rs 2.5 lakh 0%  NIL
Rs 3 lakh to 6 lakh 5%  15,000 Rs 2.5 lakh to 5 lakh 5%  12,500
Rs 6 lakh to 9 lakh 10%  30,000 Rs 5 lakh to 10 lakh 20%  1,00,000
Rs 9 lakh to 12 lakh 15%  45,000 Above 10 lacs 30%  97,500
Rs 12 lakh to 15 lakh 20%  60,000
Total Tax payable  1,50,000 Total Tax payable  2,10,000
Less: Rebate U/s 87A (rebate is available for Income upto 7 lacs only, No rebate to individuals having income more than 7 lacs)  – Less: Rebate U/s 87A  –
Tax Payable  1,50,000 Tax Payable  2,10,000

Conclusion:   If income is more than 15 lacs then it’s preferrable to go with new tax regime

Situation 8: If your Income is 20 lakh in a FY 2023-24, and have deduction under Section 80C-1.5 lacs and 80D- 25000

Gross Income  20,00,000 Gross Income  20,00,000
Les: 80C (Not allowed under New Regime)  – Les: 80C  1,50,000
Les: 80D (Not allowed under New Regime)  – Les: 80D  25,000
Net Income  20,00,000 Net Income  18,25,000
New Tax Regime Rate  Amount Old Tax Regime Rate  Amount
Rs 0 to Rs 3 lakh 0%  NIL Rs 0 to Rs 2.5 lakh 0%  NIL
Rs 3 lakh to 6 lakh 5%  15,000 Rs 2.5 lakh to 5 lakh 5%  12,500
Rs 6 lakh to 9 lakh 10%  30,000 Rs 5 lakh to 10 lakh 20%  1,00,000
Rs 9 lakh to 12 lakh 15%  45,000 Above 10 lakh 30%  2,47,500
Rs 12 lakh to 15 lakh 20%  60,000
Above 15 Lakh 30%  1,50,000
Total Tax payable  3,00,000 Total Tax payable  3,60,000
Less: Rebate U/s 87A (rebate is available for Income up to 7 lacs only, no rebate to individuals having income more than 7 lacs)  – Less: Rebate U/s 87A  –
Tax Payable  3,00,000 Tax Payable  3,60,000

Conclusion: If income is more than 20 lacs then it is preferable to go with the New Regime

Author Bio

ANRA have team of experienced professionals committed to work as your growth partners I am a Partner with the ANRA & Associates practice and is based in New Delhi & Gurgaon. I have working experience in Accounts Management, Direct and Indirect taxation, registrations, Foreign Compliances View Full Profile

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2 Comments

  1. Prince says:

    Situation 1: 7 lakhs, old tax regime, tax is 1,12,500
    Situation 2: 9 lakhs, old tax regime, tax is 92,500, Totally confusing.

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