Budget 2020 proposed a new optional tax regime with reorganised tax slabs and hope for lesser tax liabilities. The new budget has also decreased 70 tax exemptions which were being enjoyed by us earlier.

Taxpayers get the options to choose either the old tax regime or the new tax regime with their own pros and cons.

New tax regime comes with a rider to forego various exemptions being provided under the old regime like 80C, 80D, Housing Loan, Standard Deduction, Travelling Allowance etc.

 

Following are certain computations for a better understanding of the benefit or loss by the new regime

 

 

Old Regime

 

New Regime

 

Tax Benefit/Loss

Income

 

750000

 

750000

 

 

Deductions

 

 

 

 

 

 

80C

 

150000

 

 

 

 

80D

 

25000

 

 

 

 

Housing Loan

200000

 

 

 

 

Standard Deduction

50000

 

 

 

 

Taxable Income

325000

 

750000

 

 

 

 

 

 

 

 

 

Upto INR 5 Lakhs

0

 

0

 

 

From INR 2.5 to 5 Lakhs

5%

12500

5%

12500

 

From INR 5 to 7.5 Lakhs

20%

NA

10%

7500

 

Total Tax Payable

 

12500

 

20000

52500

             

 

 

Old Regime

 

New Regime

 

Tax Benefit/Loss

Income

 

1000000

1000000

1000000

 

 

Deductions

 

 

 

 

 

 

80C

 

150000

 

 

 

 

80D

 

25000

 

 

 

 

Housing Loan

200000

 

 

 

 

Standard Deduction

50000

 

 

 

 

Taxable Income

575000

575000

1000000

 

 

Slabs

 

 

 

 

 

From

To

 

 

 

 

 

0

250000

0

 

0

 

 

250000

500000

5%

12500

5%

12500

 

500000

750000

20%

15000

10%

25000

 

 

 

 

 

15%

37500

 

Total Tax Payable

 

27500

 

75000

47500

             

 

 

Old Regime

 

New Regime

 

 

Income

 

1000000

2000000

2000000

 

 

Deductions

 

 

 

 

 

 

80C

 

150000

 

 

 

 

80D

 

25000

 

 

 

 

Housing Loan

200000

 

 

 

 

Standard Deduction

50000

 

 

 

 

Taxable Income

1575000

1575000

2000000

 

 

Slabs

 

 

 

 

 

From

To

 

 

 

 

 

0

250000

0

 

0

 

 

250000

500000

5%

12500

5%

12500

 

500000

750000

20%

50000

10%

25000

 

750000

1000000

20%

50000

15%

37500

 

1000000

1250000

30%

75000

20%

50000

 

1250000

1500000

30%

75000

25%

62500

 

Above 15 Lakhs

30%

22500

30%

150000

 

Total Tax

 

 

285000

 

337500

52500

             

 

 

Old Regime

 

New Regime

 

Tax Benefit/Loss

Income

 

1000000

3000000

3000000

 

 

Deductions

 

 

 

 

 

 

80C

 

150000

 

 

 

 

80D

 

25000

 

 

 

 

Housing Loan

200000

 

 

 

 

Standard Deduction

50000

 

 

 

 

Taxable Income

2575000

2575000

3000000

 

 

Slabs

 

 

 

 

 

 

From

To

 

 

 

 

 

0

250000

0

 

0

 

 

250000

500000

5%

12500

5%

12500

 

500000

750000

20%

50000

10%

25000

 

750000

1000000

20%

50000

15%

37500

 

1000000

1250000

30%

75000

20%

50000

 

1250000

1500000

30%

75000

25%

62500

 

1500000

1750000

30%

322500

30%

450000

 

Total Tax

 

 

585000

 

637500

52500