Revenue Tax Calculations for New vs Previous Tax Regime: The proposed new tax regime is all set to come back into impact on April 1, 2025.
The brand new system can be relevant for the monetary 12 months 2025-26.
For the present monetary 12 months (2024-25), taxpayers can file their return as per the previous tax regime and the prevailing new tax regime.
The ITR submitting can probably begin in June.
Although the prevailing tax regime is the default regime for brand new taxpayers, they will nonetheless swap to any regime between the previous and the brand new.
However no matter tax regime you go for this monetary 12 months or the subsequent monetary 12 months, are you aware your earnings tax legal responsibility for annual incomes of Rs 7.50 lakh, Rs 13 lakh, Rs 15 lakh, Rs 22.5 lakh, Rs 30 lakh, and Rs 37.5 lakh?
Let’s learn the article to know!
Present new tax regime
Within the present tax regime, tax begins from the Rs 3 lakh earnings slab.
After a tax rebate of Rs 25,000 beneath Part 87A, earnings as much as Rs 7 lakh is tax-free for resident people (not relevant for NRIs).
An ordinary deduction of Rs 75,000 is relevant for salaried people, rising their tax-free restrict by the identical quantity.
Taxpayers must pay 15 per cent tax on earnings of Rs 10 lakh-12 lakh, 20 per cent on Rs 12 lakh-Rs 15 lakh earnings, whereas the tax slab of 30 per cent begins from Rs 15 lakh earnings.
Previous tax regime
Most taxpayers have shifted to the brand new tax regime, however many nonetheless observe the previous regime.
The regime gives tax-free earnings as much as Rs 5,00,000 after a tax rebate of Rs 12,500.
There’s a 20 per cent tax on earnings above Rs 5,00,000, whereas the 30 per cent tax slab begins from Rs 10,00,000 earnings.
The attraction of the previous tax regime is tax advantages akin to these beneath Part 80C of the Revenue Tax Act, 1961.
Proposed new tax regime
Finance minister Nirmala Sitharaman introduced adjustments within the new tax regime in Finances 2025, making an earnings as much as Rs 12,00,000 tax-free for non-salaried people.
The utmost tax rebate restrict was elevated from Rs 25,000 to Rs 60,000.
Salaried-class people will get an ordinary deduction of Rs 75,000, so their earnings as much as Rs 12,75,000 can be tax-free.
The regime will present marginal aid to taxpayers whose earnings crosses the tax-free restrict marginally. In such a case, their tax will not be greater than the incremental earnings.
Revenue tax calculations
We are going to calculate earnings tax liabilities for salaried-class taxpayers incomes Rs 7.50 lakh, Rs 13 lakh, Rs 15 lakh, Rs 22.5 lakh, Rs 30 lakh, and Rs 37.5 lakh a 12 months.
We won’t take any deduction for our calculations and can apply a rebate, normal deduction, and marginal aid for calculations.
Revenue tax on Rs 7.50 lakh earnings
Present new tax regime- 0
Previous tax regime- Rs 54,600
Proposed new tax regime- 0
Revenue tax on Rs 13 lakh earnings
Present new tax regime- Rs 88,400
Previous tax regime- Rs 1,95,000
Proposed new tax regime- Rs 26,000
Revenue tax on Rs 15 lakh earnings
Present new tax regime- Rs 1,30,000
Previous tax regime- Rs 2,57,400
Proposed new tax regime- Rs 97,500
Revenue tax on Rs 22.5 lakh earnings
Present new tax regime- Rs 3,56,200
Previous tax regime- Rs 4,91,400
Proposed new tax regime- Rs 2,53,500
Revenue tax on Rs 30 lakh earnings
Present new tax regime- Rs 5,90,200
Previous tax regime- Rs 7,25,400
Proposed new tax regime- Rs 4,75,800
Revenue tax on Rs 37.50 lakh earnings
Present new tax regime- Rs 8,24,200
Previous tax regime- Rs 9,59,400
Proposed new tax regime- Rs 7,09,800
