As the new financial year begins on April 1, salaried individuals are required to choose between the new and old tax regimes. Only three days are left, so act fast because this election will directly affect you take-home salary, Your employer will deduct the income from your salary based on the selection of Making the wrong decision can have a huge impact on your take-home income. If you are one of those who are struggling to decide between the two, these tips can help you make the right choice at the last minute.
1) If your income is up to 7 lakh then the new tax regime is better because there is no tax in it 7 lakhs and in addition there is a standard deduction 50,000 in the new tax regime. As per the changes proposed in the budget, no tax will be levied on people up to annual income of Rs. 7 lakh under the new tax regime but it did not make any change for those who continue in the old regime which provided tax exemptions and deductions on investments and expenses like HRA.
2) If you do not have any deductions to avail, then consider going for the new tax regime, as the tax rates are lower and no deductions are available on investments.
3) Under the new regime, taxpayers will have to give up exemptions such as leave travel allowance, house rent allowance, tuition fee and interest on housing loan, among other exemptions.
No tax will be charged on income up to 3 lakh
income between 3-6 lakh will be taxed at 5%
income between 6-9 lakhs will be taxed at 10%
income between 9-12 lakhs at 15%
income between 12-15 lakhs at 20%
income of 15 lakh and above will be taxed at 30 per cent.
5) old tax slab
income up to 2.5 Exempt from taxation under the old tax regime.
income between from 2.5 Under the old tax regime, Rs 5 lakh is taxed at the rate of 5 per cent.
personal income from 5 lakhs onwards 7.5 lakh is taxed at the rate of 15 per cent under the old regime
income between 7.5 Lakh onwards 10 lakh is taxed at the rate of 20 percent in the old regime
Personal income above, under old rule 10 lakh is taxed at the rate of 30 per cent.
Presenting the Union Budget 2023 on February 1, Finance Minister Nirmala Sitharaman said that a person whose annual income is 9 lakhs only to be paid 45,000. This is just 5 per cent of his income. This is a 25 per cent reduction on the amount required to be paid in the old regime.
a person whose income 15 lakhs only would need to be paid 1.5 lakh or 10 per cent of his income, a reduction of 20 per cent from the existing liability 1,87,500 Sitharaman had said.
7) NPS Deduction 50,000 available under the old regime
8) The Income Tax Department has launched a tax calculator , All you need to do is fill in the relevant details, and the calculator will determine which option works better for you.
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