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?
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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 |
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Hi @MadhuPR
It purely depends on the salary. But I feel old is better 
personal opinion!
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use the tax calculator in
https://www.incometaxindiaefiling.gov.in/Tax_Calculator/
to see if the old or new tax regime benefits you.
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