The new regimen rules of income tax have come into effect from April 1. If you do a job, then you will have to tell your company’s finance department by the second or third week of April, which of the new and old reizards of income tax will be used. The company’s finance department will deduct tax from your salary every month accordingly. If you were still using Old Regim, then you should also calculate your possible tax in the new regimen as well.
These things make the new regimen of income technus special
It is important for you to know some basic things about the new reizards. First, the government has increased the basic exhalation limit to Rs 4 lakh in the new regimen. This means that if your annual income is up to Rs 4 lakh, then you do not need to pay tax. Second, in the budget presented on 1 February this year, Finance Minister Nirmala Sitharaman had said that those who have annual income up to Rs 12 lakh will not have to pay tax in the new regimen. Third, the government has also changed the tax slab in the new regimen. People with more income will also have to pay less tax.
People who do not do much deduction benefit
If you do a job, you will not have to pay tax on income up to Rs 12.75 lakh annually in the new regimen. The new regim is very easy. The calculation of tax in this is also very easy. According to the Calukulation of Deloit India, if a person with an income of Rs 24 lakh annually claims up to Rs 8 lakh deduction, then the old regimen will be beneficial for him. It is not easy to claim deduction up to Rs 8 lakh annually. This means that the new regimen of income tax is beneficial for the taxpayers who do not claim much deduction.
Tax slabs in new tax regimen
Now it is important to know about the new tax slab of the new regimen. It has tax zero on income of Rs 4 lakh. There is a 5 percent tax on income of Rs 4 lakh to 8 lakhs. Tax on income of Rs 8 to 12 lakhs, tax of Rs 10 per cent on Rs. 12 to 16 lakh, tax of Rs. 16 to 20 lakhs, 20 per cent on income, Rs 20 to 24 lakhs, tax of Rs 25 per cent on income and 30 per cent tax on income of more than Rs 24 lakh.
This will be tax calculations
Suppose your annual income is 20 lakh rupees. You will first have to reduce Rs 75,000 from your salary of Rs 20 lakh. After this your taxable income will be Rs 19.25 lakh. Now the first 4 lakh rupees of your income will be taxed. Income of Rs 4 to 8 lakh will be taxed at Rs 20,000 at a rate of 5 %. Your income of 8 to 12 lakh rupees will be taxed at 10 percent. Accordingly, your tax will be Rs 40,000 at the rate of 10 percent on this income of Rs 4 lakh. Then, the tax rate on income of Rs 12 to 16 lakhs is 15 percent. Accordingly, your tax will be Rs 60,000 on this 4 lakh rupees. The tax on income of 16 to 20 lakh rupees is 20 percent. Accordingly, tax of Rs 65,000 will be made at Rs 20 per cent on the income of your remaining Rs 3.25 lakh.
You can also calculate tax yourself
In this way your total tax will be Rs 1.85 lakh (20,000+40,000+60,000+65,000). You will also have to pay 4 percent cess on this tax. It will be Rs 7,400. After adding it, your total tax will be Rs 1,92,400. This is just an example. Based on this example, you can easily calculate tax on your income. All you have to do is take care of the tax slab. If the salary of a taxpayers is Rs 23 lakh, then he will have to calculate tax according to 25 percent tax on 20 to 24 lakhs.