Income Tax Calculation: Old Regime Vs New Regime

Aisha | Last updated: 11 February 2023

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.

Income Tax Calculation: Old Regime Vs New Regime

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