Published: 24th July 2024
By: Value Research
Yesterday’s budget proposed a slew of changes to the new tax regime, further strengthening its appeal against the old tax regime.
The slab rates have been revised and the standard deduction has increased from Rs 50,000 to Rs 75,000. These two changes will help those in the 30% tax bracket to pay Rs 17,500 less in taxes.
Here’s how you will be taxed as per the revised income tax slabs.
New tax regime (existing) Rate of tax New tax regime (revised) Rate of tax Up to Rs 3 lakh 0 Up to Rs 3 lakh 0 Rs 3-6 lakh 0.05 Rs 3-7 lakh 0.05 Rs 6-9 lakh 0.1 Rs 7-10 lakh 0.1 Rs 9-12 lakh 0.15 Rs 10-12 lakh 0.15 Rs 12-15 lakh 0.2 Rs 12-15 lakh 0.2 Above Rs 15 lakh 0.3 Above Rs 15 lakh 0.3
This is not to say that the new tax regime is superior to the old one in every aspect. Despite the new tax regime’s simplified structure and increased benefits, the old regime does provide a few tax deduction elements.
Old Tax Regime (Rs) New Tax Regime (Rs) Standard deduction 50000 75000 80C investments 1,50,000 - Self-contribution to NPS 50000 - Interest on home loan 2,00,000 - Medical insurance 25000 - House rent allowance Depends on the salary and the rent you pay Total 4,75,000 75000Deductions
If your deductions mentioned in your salary structure exceed the amount mentioned in the third column of this table, you should opt for the old tax regime. If it doesn’t, stick with the new one.
Those looking to sell their property or gold may have to cough out higher taxes. You can read the full story by clicking the link below: