Budget 2024 has proposed to change the income tax slabs under the new tax regime. The changes in the income tax slabs under the new tax regime will mainly benefit people having taxable incomes upto Rs 10 lakh. There is no change in the basic exemption limit under the old and new tax regimes. Remember, there is zero tax payable under the new tax regime if taxable incomes does not exceed Rs 7 lakh. Further, the income tax slabs are changed to give relief to the lower middle class. The proposed tax slabs are: 0 – Rs 3,00,000 – 0%, Rs 3,00,001-Rs 7,00,000-5%, Rs 7,00,001-Rs 10,00,00-10%, Rs 10,00,001- Rs 12,00,000-15%, Rs 12,00,001-Rs 15,00,000- 20% and Rs 15,00,001 and above – 30%.
Also Read: New income tax slabs in new tax regime announced in Budget 2024
Existing tax slabs under new tax regime are: 0 – Rs 3,00,000 – 0%, Rs 3,00,001-Rs 6,00,000-5%, Rs 6,00,001-Rs 9,00,00-10%, Rs 9,00,001- Rs 12,00,000-15%, Rs 12,00,001-Rs 15,00,000- 20% and Rs 15,00,001 and above – 30%.
Given below are the tax savings for those earning above Rs 7 lakh due to changes in the income tax slabs in the new tax regime. The tax payable and the tax saved (after the Budget proposals) is given for the same income under the old tax regime and proposed new regime and current and proposed tax slabs under new tax regime.
Assumptions:
CASE 1 Only standard deduction: In the table given below, only standard deduction is claimed. Currently, under the old and new tax regimes, standard deduction of Rs 50,000 is available to the salaried and pensioners. However, Budget 2024 has proposed to hike the standard deduction amount to Rs 75,000 in the new tax regime only.
| Tax Payable/Saving: Old Tax Regime vs. New Tax Regime (Proposed) | |||
| Taxable Income | Tax under Old Regime (Col A) | Tax under Proposed New Tax Regime (Col B) | Tax Savings/Payable(C=A-B) |
| 7,75,000 | 59800 | 0 | 59800 |
| 15,00,000 | 257400 | 130000 | 127400 |
| 25,00,000 | 569400 | 434200 | 135200 |
| 30,00,000 | 725400 | 590200 | 135200 |
| 50,00,000 | 1349400 | 1214200 | 135200 |
| 1,00,00,000 | 3200340 | 3051620 | 148720 |
| 1,50,00,000 | 5139810 | 4984330 | 155480 |
| 2,00,00,000 | 6933810 | 6778330 | 155480 |
| 6,00,00,000 | 25357878 | 22967750 | 2390128 |
| Tax Payable/Saving: Existing New Tax Regime vs. Proposed New Tax Regime | |||
| Taxable Income | Tax under existing new regime (Col A) | Tax under proposed New Tax Regime (Col B) | Tax Saving/Payable (C=A-B) |
| 775000 | 26000 | 0 | 26000 |
| 1500000 | 145600 | 130000 | 15600 |
| 2500000 | 452400 | 434200 | 18200 |
| 3000000 | 608400 | 590200 | 18200 |
| 5000000 | 1232400 | 1214200 | 18200 |
| 10000000 | 3071640 | 3051620 | 20020 |
| 15000000 | 5005260 | 4984330 | 20930 |
| 20000000 | 6799260 | 6778330 | 20930 |
| 60000000 | 22990500 | 22967750 | 22750 |
CASE 2 Standard deduction and Section 80C deduction: In the table given below, we have assumed that the taxpayer claims standard deduction and Section 80C deduction. Remember, the Section 80C deduction is available under the old tax regime only. A salaried individual can claim deduction of up to Rs 1.5 lakh by making specified investments and expenditures such as EPF, PPF, Bank tax saving FDs, kids school fees.
| Tax Payable/Saving: Old Tax Regime vs. Proposed New Tax Regime | |||
| Taxable Income | Tax under Old Regime (Col A) | Tax under proposed New Tax Regime (Col B) | Tax Saving/Payable (C=A-B) |
| 775000 | 28600 | 0 | 28600 |
| 1500000 | 210600 | 130000 | 80600 |
| 2500000 | 522600 | 434200 | 88400 |
| 3000000 | 678600 | 590200 | 88400 |
| 5000000 | 1302600 | 1214200 | 88400 |
| 10000000 | 3148860 | 3051620 | 97240 |
| 15000000 | 5085990 | 4984330 | 101660 |
| 20000000 | 6879990 | 6778330 | 101660 |
| 60000000 | 25293762 | 22967750 | 2326012 |
| Tax Payable/Saving: Existing New Tax Regime vs. Proposed New Tax Regime | |||
| Taxable Income | Tax under existing new tax Regime (Col A) | Tax under proposed New tax Regime (Col B) | Tax Saving/Payable (C=A-B) |
| 775000 | 26000 | 0 | 26000 |
| 1500000 | 145600 | 130000 | 15600 |
| 250000 | 452400 | 434200 | 18200 |
| 3000000 | 608400 | 590200 | 18200 |
| 5000000 | 1232400 | 1214200 | 18200 |
| 10000000 | 3071640 | 3051620 | 20020 |
| 15000000 | 5005260 | 4984330 | 20930 |
| 30000000 | 6799260 | 6778330 | 20930 |
| 60000000 | 22990500 | 22967750 | 22750 |
CASE 3: Standard deduction, Section 80C deduction and certain exemption from salaries: In the table given below, it is assumed that the taxpayer is claiming standard deduction, Section 80C deduction and certain other exemptions available from salary income. Remember, these exemptions are available under the old tax regimes only. Here it is assumed that, in addition to standard deduction and 80C deduction, 20% of an employee’s gross salary is exempt from tax under exemptions such as HRA etc. New tax regime offers only two deductions only – Standard deduction and Deduction on employer’s contribution to employee’s NPS account.
| Tax Saving/Payable: Old Tax Regime vs. Proposed New Tax Regime | |||
| Taxable Income | Tax under Old Regime (Col A) | Tax under Proposed New Tax Regime (Col B) | Tax Saving/Payable (C=A-B) |
| 775000 | 0 | 0 | 0 |
| 1500000 | 117000 | 130000 | -13000 |
| 2500000 | 366600 | 444600 | -78000 |
| 3000000 | 491400 | 590200 | -98800 |
| 5000000 | 990600 | 1224600 | -234000 |
| 10000000 | 2462460 | 3063060 | -600600 |
| 15000000 | 4009590 | 4996290 | -986700 |
| 20000000 | 5444790 | 6790290 | -1345500 |
| 60000000 | 18398250 | 22980750 | -4582500 |
| Tax Saving/Payable: Existing New Tax Regime vs. Proposed New Tax Regime | |||
| Taxable Income | Tax under Existing New Regime (Col A) | Tax under Proposed New Tax Regime (Col B) | Tax Saving/Payable (C=A-B) |
| 775000 | 26000 | 0 | 26000 |
| 1500000 | 145600 | 130000 | 15600 |
| 2500000 | 452400 | 444600 | 7800 |
| 3000000 | 608400 | 590200 | 18200 |
| 5000000 | 1232400 | 1224600 | 7800 |
| 10000000 | 3071640 | 3063060 | 8580 |
| 15000000 | 5005260 | 4996290 | 8970 |
| 30000000 | 6799260 | 6790290 | 8970 |
| 60000000 | 22990500 | 22980750 | 9750 |
Source: Grant Thornton Bharat LLP
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