New or Old regime for deductions for life insurance, ELSS and other investments

Hi,

Which is beneficial? Employee should opt for new tax regime (no deductions) or continue with old tax regime and claim deductions for life insurance, ELSS and other investments?

2 Likes

Hi Madhu,

This will depend on Case to Case based on Salary employee is earning and investment he or she makes.

Annual Income of Rs.5,00,000 (without exemption)
Old Regime New Regime
Income tax slab Tax Rate (%) Tax (Rs.) Tax Rate Tax (Rs.)
Up to Rs. 2,50,000 0 0 0 0
250001 – 500000 5 12500 5 12500
(-) Rebate -12500 -12500
Tax Payable 0 0
Annual Income of Rs.7,50,000 (without exemption)
Old Regime New Regime
Income tax slab Tax Rate Tax (Rs.) Tax Rate Tax (Rs.)
Up to Rs. 2,50,000 0 0 0 0
250001 – 500000 5 12500 5 12500
500001 – 750000 20 50000 10 25000
Sum 62500 37500
Health and Education cess 4 2500 4 1500
Tax Payable 65000 39000
Annual Income of Rs.7,50,000 (with exemption)
Annual Income 750000
Exemptions u/s 80C -150000
u/s 80CCD(1B) -50000
u/s 80D -50000
HRA -10000
Taxable Income 4,90,000
Old Regime New Regime
Income tax slab Tax Rate Tax (Rs.) Tax Rate Tax (Rs.)
Up to Rs.2,50,000 0 0 0 0
250001 – 500000 5 12500 5 12500
500001 – 750000 0 0 10 25000
(-) Rebate -12500
Sum 0 37500
health and education cess 4 0 4 1500
Tax Payable 0 39000
2 Likes

Hi @MadhuP1

It purely depends on the salary. But I feel old is better :wink: personal opinion!

1 Like

use the tax calculator in
https://www.incometaxindiaefiling.gov.in/Tax_Calculator/

to see if the old or new tax regime benefits you.

2 Likes
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