In India, the income tax is governed by the Income Tax Act, 1961 and is imposed by the Central Board of Direct Taxes (CBDT). The taxable income of an individual is taxed at different slab rates, based on the individual's income level.
Let us take an example to understand the differences between old regime vs new regime.
Sunita is an individual works in a company situated in Delhi. She receives salary amounting 105,000 per month, special allowances 20000 per month and pays rent 40,000 per month. She paid LIC premium, PFF investment etc overall amounting 160000. She paid self medical insurance premium 15000. Received Saving Bank Interest is 20000.
Calculation of income in India under Old Regime (FY 2022-23)
|
Particulars |
Amount |
|
Income From Salary [105,000*12] |
1260000 |
|
Add: Special Allowances [20000*12] |
240000 |
|
Add: HRA [1260000 @ 50%] - [40000 * 12 - 1260000*10%] |
276000 |
|
Less: Standard Deduction |
50000 |
|
Total Income from Salary |
1726000 |
|
Add: Income from Other Sources [SB Interest] |
20000 |
|
Less: Deductions |
|
|
80C [paid 1,60,000 but limit is upto 1,50,000] |
150000 |
|
80D [For self exemption is upto 25,000] |
15000 |
|
80TTA [Limit is upto 10000 for SB Interest] |
10000 |
|
Gross Taxable Income |
1571000 |
|
Tax before cess [112500+(1571000-1000000)*30%] |
283800 |
|
Add: cess @4% [283800 @ 4%] |
11352 |
|
Total Tax Payable |
295152 |
Calculation of income in India under New Regime (FY 2023-24)
|
Particulars |
Amount |
|
Income From Salary [105,000*12] |
1260000 |
|
Add: Special Allowances [20000*12] |
240000 |
|
Add: HRA [1260000 @ 50%] |
630000 |
|
Less: Standard Deduction |
50000 |
|
Total Income from Salary |
2080000 |
|
Add: Income from Other Sources [SB Interest] |
20000 |
|
Less: Deductions |
|
|
80C |
0 |
|
80D |
0 |
|
80TTA |
0 |
|
Gross Taxable Income |
2100000 |
|
Tax before cess [150000+(2100000-1500000)*30%] |
330000 |
|
Add: cess @4% [330000 @ 4%] |
13200 |
|
Total Tax Payable |
343200 |
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