Table of Contents
Which tax regime is better for 6lpa?
Here are some of the most popular options you can choose for tax saving for 6.5L income: One of the most common ways of saving taxes is by availing deduction under Section 80C of the Income Tax Act. With Section 80C, a taxpayer can avail tax deductions of up to Rs 1.5 lakh, which lowers your tax burden considerably.
Is 80C applicable in new tax regime?
From FY 2020-21, an individual can continue with the old or existing tax regime and avail common deductions such as section 80C, section 80D etc. Else, she/he can opt for the new, concessional tax regime without any commonly availed deductions and tax exemptions.
How much tax do I pay on 8lpa?
If an individual has a salary of Rs 8 lakh per annum, and he/she has opted for a new income tax slab regime, then an income tax will be Rs 46,800. It is calculated without any exemptions and deductions.
Should I opt for old tax regime or new tax regime?
It can be said that if you are claiming more deductions and exemptions then opting Old tax regime works better for you. However, it is advisable to perform calculation of tax under both regime and then opt accordingly.
Which tax regime is better for 8.5 lakhs?
Scenario 3: Someone availing all major exemptions and deductions
| Income Tax Calculation (Old vs. New Tax Regime) | ||
|---|---|---|
| Old Tax Regime (₹) | New Tax Regime (₹) | |
| a) Annual Income | 20,00,000 | 20,00,000 |
| b) Standard Deduction | -50,000 | |
| c) Section 80C (EPF +ELSS Mutual fund) | -1,50,000 |
Which one is better old tax regime or new tax regime?
Under the new tax regime tax is payable at lower slab rates on the income up to Rs. 15 lakh as compared to old regime. If you wish to opt for the new tax regime you have to forgo various tax deductions and exemptions otherwise available under old regime.
Which is good old tax regime or new?
We can see in the above example that the old tax regime is beneficial to Taxpayer 1 as taxes are less by INR 37,440. In case of taxpayer 2, where deductions for HRA and LTA are not applicable, the new tax regime is more beneficial by INR 15,600.
Is new or old tax regime better?
The net tax benefit forgone is higher than the tax liability of Rs. 62,500 under new scheme. For those in 30\% tax slab the tax effect of the benefit forgone @ 30\% would be 1.20 lakh against the tax saving of Rs. 37,500 accruing by opting for new regime.
What is the new tax regime for income up to 15 lakh?
The new tax regime has lower income tax rates for income up to 15 lakh but what needs to be focused upon is that lower income tax rates are available only if a taxpayer is willing to give up exemptions and deductions available under various provisions of Income tax act, 1961.
What is the difference between old and new tax regime?
Taxpayers with annual income between RS.5 lakhs to Rs.10 lakhs are taxed at 20\%, under the old regime. And in the new regime, they will be taxed at half that rate i.e. 10\%. Also, those with an annual income of Rs.7.5 lakhs to Rs.10 lakhs will have to pay a 15\% income tax.
What are the Section 80C tax deductions?
The biggest section for deduction is Section 80c through which you can bring down your taxable income by Rs.1.5 lakh. Apart from this, there are several other sections that let you take tax deductions on things ranging from interest on your loans (home and education) to premiums you pay for health insurance.
What are the pros and cons of old and new taxation?
A person availing very high deductions like HRA, 80C, 80D shall be benefitted under old taxation regime by claiming those deductions and saving money. Both taxation regimes have their own pros and cons. The old taxation regime inculcates habit of investing in a taxpayer.