TDS on salary below 5 lakhs and Tax slabs

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Prapti (Querist)

24 January 2024 My annual salary is 5 lakhs yet my employer deducts TDS since my salary goes beyond 3 lakhs. Can anyone guide on this. As per my knowledge if i am opting for new regime i shall not liable for any tax.
2nd what are the tax slabs for new regime? since Income Tax website shows as below for new regime as well.
Up to ₹ 2,50,000- nil
2,50,001 - ₹ 5,00,000- 5%
5,00,001 - ₹ 7,50,000- 10%
7,50,001 - ₹ 10,00,000- 15% and so on.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

11 July 2024 Based on the information you provided, let's address your queries regarding TDS deductions and the tax slabs under the new tax regime in India:

### TDS Deduction on Salary:

1. **TDS Deduction by Employer:**
- Employers are required to deduct TDS (Tax Deducted at Source) on salaries paid to employees based on their projected total income for the financial year.
- TDS is deducted according to the income tax slabs applicable to the employee's estimated total income, which includes salary, income from other sources, etc.
- If your employer deducts TDS from your salary, it means they are following the tax rules applicable to your income bracket.

2. **Opting for the New Tax Regime:**
- The new tax regime introduced in Budget 2020 provides reduced income tax rates but without certain deductions and exemptions that are available under the old regime.
- Under the new tax regime, you can opt for lower tax rates without claiming deductions such as HRA, LTA, standard deduction, etc.
- If you opt for the new tax regime, you won't get tax benefits such as deductions under Section 80C, 80D, etc., but you will be subject to lower tax rates.

### Tax Slabs for New Regime:

These tax rates are applicable if you choose the new tax regime and do not claim any deductions or exemptions.

### Conclusion:

- **TDS Deduction:** Your employer deducts TDS based on the tax laws applicable to your estimated total income, including salary and other income.
- **New Tax Regime:** If you opt for the new tax regime, you can avail lower tax rates without claiming deductions, which simplifies tax calculation but reduces the scope for tax-saving investments.

To ensure accurate tax compliance and optimal tax planning, especially regarding the choice between the old and new tax regimes, it's advisable to consult with a tax advisor or a chartered accountant who can provide personalized guidance based on your specific financial situation and goals.

If you have further questions or need clarification on any aspect, feel free to ask!

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