New Regime Tax Calculations: The monetary 12 months 2024-25 is nearly to finish. Taxpayers can file their revenue tax return (ITR) within the previous and new tax regimes.
Nevertheless, the image will change from the monetary 12 months 2025-26, which is able to begin on April 1, 2025.
Taxpayers will have the ability to file their ITR as per the proposed new tax regime, which was launched in Funds 2025 final month.
Most important modifications in new tax regime
Essentially the most putting change within the new tax regime is that revenue as much as Rs 12,00,000 is tax-free for non-salaried people.
So far as salaried-class people are involved, they do not need to pay any tax until the revenue of Rs 12,75,000.
| Proposed Tax Regime | |
| Earnings Tax Slabs | Tax Charge |
| Upto Rs. 4,00,000 | NIL |
| Rs. 4,00,001 – Rs. 8,00,000 | 5% |
| Rs. 8,00,001 – Rs. 12,00,000 | 10% |
| Rs. 12,00,001 – Rs. 16,00,000 | 15% |
| Rs. 16,00,001 – Rs. 20,00,000 | 20% |
| Rs. 20,00,001 – Rs. 24,00,000 | 25% |
| Above Rs. 24,00,000 | 30% |
However what if their revenue is Rs 1,500,000? What would be the tax legal responsibility, and might they make it tax-free? How?
Tax legal responsibility on Rs 1,500,000 revenue
Earlier than figuring out that, let’s undergo tax slabs within the proposed new tax regime. Right here, you possibly can see that revenue from Rs 12,00,000 to Rs 16,00,000 falls within the bracket of 15 per cent.
Tax legal responsibility on Rs 15,00,000 revenue
After a typical deduction of Rs 75,000 underneath Part 87A of the Earnings Tax Act, 1961, tax legal responsibility on the taxable revenue of Rs 14,25,000 will probably be Rs 97,500, the place Rs 3,750 is the well being and training cess.
Now the query is methods to make it tax-free.
How one can make Rs 15,00,000 revenue tax-free
Within the proposed tax regime, there are specific relaxations that may make your revenue of Rs 15,00,000 tax-free.
- Nationwide Pension System contribution from employer’s facet
- Conveyance invoice reimbursement
- Uniform invoice reimbursement
- Cell phone invoice reimbursement
- Meals/leisure invoice reimbursement
Let’s undergo them one after the other.
NPS tax profit to new regime taxpayers
Taxpayers can get a tax profit on the employer’s contribution to their NPS account as much as 14 per cent of their primary wage underneath Part 80CCD(2).
Let’s assume that the fundamental wage of an individual incomes Rs 15,00,000 is Rs 7,50,000. The 14 per cent employer contribution on will probably be Rs 1,05,000.
Conveyance allowance
For conveyance that workers use for official goal, they’ll declare reimbursement for the payments they pay.
One can get this reimbursement included of their wage construction to get tax advantages.
Let’s assume that at Rs 5,000 a month, you get the good thing about Rs 60,000 a 12 months.
Uniform allowance
You could get it included in your wage construction.
At Rs 15,00,000, chances are you’ll simply get Rs 2,000 a month as a uniform allowance, which in a 12 months will probably be Rs 24,000>
Cell phone payments
In the event you use your cell phone or web connection for workplace use, you will get reimbursement for it additionally.
It may be Rs 1,500 or extra. At Rs 1,500 a month, you will get Rs 18,000 reimbursement a 12 months for the cell invoice.
Meals/leisure invoice
You can too get meals/leisure reimbursement as a part of your wage construction.
At a Rs 15,00,000 wage bundle, the reimbursement could be Rs 3,000 a month or Rs 36,000 a 12 months.
Tax legal responsibility after deduction
After a typical deduction, the taxable revenue was Rs 14,25,000.
If we embrace the sum of NPS employer contribution and reimbursements, will probably be Rs 2,43,000.
After these deductions, the taxable revenue will probably be Rs 11,82,000, the place after a rebate of Rs 38,200 underneath Part 87A, the whole revenue will probably be tax-free.
