It is challenging for you as a taxpayer to select between the old and new tax regimes because both offer advantages and disadvantages. From April 1, 2020, (FY 2020-21). As a result, Section 115BAC of the Income Tax Act of 1961 (the Act) was created, requiring individual taxpayers and HUFs who choose certain tax deductions or concessions to pay lower tax rates. I have something to say regarding the difference between old tax regime and new tax regime.
Difference between new tax regime and old tax regime:
The new budget attempts to limit taxpayers' ability to save bonuses by putting more money in their hands. Individuals and Hindu Unified Families (HUF) do, however, have the option of choosing between the old and new tax regimes.
So, the old tax rates were 0% for annual income up to Rs. 2.5 lakhs and 5% for annual income between Rs. 2.5 lakhs and Rs. 5 lakhs. 10% for you if you are earning between Rs. 5 lakh and Rs. 12.5 lakh, and 30% if you are earning more than Rs. 12.5 lakh.
The income group between Rs. 5 lakhs and Rs. 7.5 lakhs would be supposed to pay income tax at a rate of 10% under the new tax regime. And if you are earning between Rs. 7.5 lakhs and Rs. 10 lakhs will be subject to a 15% tax rate. If you are earning between Rs. 10-12.5 lakhs and Rs. 12.5-15 lakhs would be taxed at 20% and 25%, respectively. In comparison to the former tax regime, it appears that the new tax regime will cause taxpayers to pay a greater tax amount in the years ahead.
Get your sale agreement drafted to claim deduction in taxes. Don’t stress out. Pay all your utility bills at one place and get assured rewardsNew regime vs old regime:
Both the Regime's Tax Rates:
Yearly Income (Rs) |
Old Tax Rate |
New Tax Rate |
Up to 2.5 Lakhs |
Nil |
Nil |
2.5 to 5 Lakhs |
5% |
5% |
5 to 7.5 Lakhs |
20% |
10% |
7.7 to 10 Lakhs |
20% |
15% |
10 to 12.5 Lakhs |
30% |
20% |
12.5 to 15 Lakhs |
30% |
25% |
15 Lakhs and above |
30% |
30% |
All above-revised rates do not include any deductions under Chapter VI-various A's provisions.
The tax will stay the same if you claim a deduction of Rs. 2.5 lakhs (standard deduction of Rs. 50,000, Rs. 1.5 lakhs u/s 80C, and Rs. 50,000 invested in NPS).
The old tax slab rate would be Rs. 46,800 lower than the new regime if you additionally claimed a house loan interest deduction of Rs. 2 lakhs or HRA exemption.
This is your guide on the difference between old tax regime and new tax regime.
Read More: Is standard deduction applicable in new tax regime? What are deductions and exemptions? What is new tax regime? How to choose between old and new tax regime?Your Feedback Matters! How was this Answer?
Shifting, House?
✔
Lowest Price Quote✔
Safe Relocation✔
Professional Labour✔
Timely Pickup & Delivery
Intercity Shifting-Upto 25% Off
Check Prices
Intracity Shifting-Upto 25% Off
Check Prices
City Tempo-Upto 50% Off
Book Now
Authors Of The Question
Difference between new tax regime and old tax regime
vikas
900 Views
1 Answers
2 Year
2022-05-17T18:01:45+00:00 2022-05-17T18:01:47+00:00Comment
Share