If an individual earning Rs 15 lakh is wondering which tax structure will be more beneficial, then he/she can figure out the same by calculating the total amount of deductions that he/she is claiming in a financial year.
If you are a salaried individual earning an annual income of Rs 15 lakh, the table below shows you the total amount of deductions and exemptions you will have to claim so that your tax liability is the same in both tax regimes.
|| Tax payable in Existing Regime
|| Tax payable inNew Regime
| Basic Salary + DA
| Other Taxable Allowances
| Gross Salary
| Standard Deduction
| Income under the head salary
| Chapter VIA deductions
| Income under the head salary
| Income Tax (Rebate u/s 87A is NIL)
| Cess @ 4%
| Total tax, surcharge and education cess
If the total deduction claimed by you is less than Rs 2.5 lakh, then you will be better off opting for the new tax regime. On the other hand, if the total deductions and tax-exemptions claimed by you is equal to or more than Rs 2.5 lakh, then you are better off continuing with the existing tax regime.
In other words, don't switch to the new tax regime if your income is at Rs 15 lakh and the tax-exemptions and deductions claimed by you are equivalent to or exceed Rs 2.5 lakh in a financial year.
In the above table, the total of Rs 2.5 lakh is arrived at by taking into account standard deduction of Rs 50,000 (available to an individual having income from salary) and other various deductions that a taxpayer can claim provided he/she is eligible. These can be: deductions under section 80C for maximum of Rs 1.5 lakh by investing in specified financial instruments, under section 80D for health insurance premium paid for self, spouse, dependent children and parents, under section 80TTA for maximum up to Rs 10,000 on the interest received from savings account held with bank and/or post office, under 80TTB for senior citizens for the interest received from bank and/or post office etc.
3 Comments on this Story
vidya k245 days ago
The new tax regime concept is useless . There is no relief. you cannot glorify taxes in any form and make them look lucrative . Utter disappointment
Alvin Jose330 days ago
What about HRA?
amish330 days ago
This is just madness. instead of giving any benefit in current tax regime which can give more money in hand of taxpayers they have diverted attention by new text regime which is useless for good earners.
This govt is just attacking on salary class who are earning white income. evry year they are adding burden of tax on salaried class. its just creating frustration and panic.
First they add
2)Increase in Cess
3)Increase in surcharge
4)GST Service tax from 12 to 18%
5)DDT will be now 30% who are earning more than 10 Lakh
6)limiting PPF and NPS
7)Reduced rate of interest
More and more people now playing safe game as tax burden is increasing and avoiding spending.
On other side it can not do anything who are earning in black. Business class,professional still hardly pay any tax and enjoys all benefit.
Black money is dead money which does not rotate in economy and who are earning in white govt is just killing them.
Overall economy will suffer a lot.