This story is from July 26, 2024
Latest Income Tax Slabs FY 2024-2025 New Tax Regime 2023 vs New Tax Regime 2024 vs Old Tax Regime: Which income tax regime should you opt for post Budget 2024 - old regime or the revised new tax regime? How much income tax benefit will you get from the revised new tax regime, if you are already filing returns under the existing new regime? FM Nirmala Sitharaman announced that the standard deduction hike under the new tax regime and the new income tax slabs will result in salaried taxpayers saving Rs 17,500. How much income tax will you save at your salary level? We take a look at 10 tables sourced from EY to help you understand the new income tax changes and what they mean for taxpayers at various salary levels:
Latest Income Tax Slabs FY 2024-25 Under Revised New Tax Regime: FM Nirmala Sitharaman raised the standard deduction limit under the new tax regime to Rs 75,000 from the earlier limit of Rs 50,000. The tax slabs were also changed as detailed in the table.
Existing new regime 2023 versus revised new regime 2024: Let’s consider a scenario where an individual salaried taxpayer is earning Rs 5.5 lakh. In this scenario, if the taxpayer is already under the new (existing) regime, then there is no change under the revised new tax regime. Under both scenarios, the individual has to pay zero tax.
Existing new regime 2023 versus revised new regime 2024: For an individual having an income of Rs 10 lakh, the revised new income tax regime will bring a benefit of Rs 10,400, since the total tax outgo will reduce from Rs 54,600 under the existing new regime to Rs 44,200.
Existing new regime 2023 versus revised new regime 2024: Let’s now consider a salaried taxpayer with an income of Rs 20 lakh. In the existing new income tax regime versus revised new income tax regime comparison, the tax outgo will reduce by Rs 18,200.
Existing new regime 2023 versus revised new regime 2024: For income levels above Rs 50 lakh, the surcharge kicks in. In our example, we are considering an income of Rs 65 lakh. The total tax saving under the revised new tax regime will be Rs 20,020 as against the existing new tax regime.
Existing new regime 2023 versus revised new regime 2024: If an individual taxpayer has an income of Rs 6 crore, then under the revised new income tax regime, the tax benefit would be Rs 22,750 compared to the existing new tax regime.
Old versus revised new tax regime: Let us consider an individual with Rs 5.5 lakh income, who avails no deductions and exemptions except for standard deduction. For such a salaried taxpayer, the tax outgo under both the old and revised new tax regime is zero.
Old versus revised new tax regime: At a salary of Rs 7.75 lakh, for an individual availing Rs 50,000 standard deduction and Rs 50,000 Section 80C benefits under the old regime, the tax outgo is Rs 49,400. However, if this individual were to opt for the revised new income tax regime, then the tax outgo would be zero - which means a tax benefit of Rs 49,400 for switching from the old to the revised new tax regime.
Old versus revised new tax regime: At a Rs 20 lakh salary level, for an individual availing Rs 4 lakh as deductions and exemptions (including common ones like housing loan deductions/HRA and Section 80C) under the old income tax regime, the revised new tax regime would help save tax of Rs 26,000!