New Slab rates for Individuals if no exemptions/deduction
New Slab rates for Individuals if no exemptions/deduction
An Optional Tax Regime Sec 115BAC
Finance Minister Nirmala Sitharaman has proposed a new optional tax regime in the budget 2020 for the FY 2020-21 with low rates of taxes, however, to opt new rates, benefits of popular deductions like 80C, 80D , home loan interest benefits has to foregone.
The comparison of new Income-tax slab rates with Old rates applicable under the new tax regime would be as follows:
| Slab Rates | New Rate of Tax | Old Rate of Tax |
| Upto to INR 2,50,000 | Nil | Nil |
| INR 2,50,001 to INR 500,000 | 5% | 5% |
| INR 500,001 to INR 750,000 | 10% | 20% |
| INR 750,001 to INR 10,00,000 | 15% | |
| INR 10,00,001 to INR 12,50,000 | 20% | 30% |
| INR 12,50,001 to INR 15,00,000 | 25% | |
| Above INR 15,00,000 | 30% |
Surcharge & Cess would apply as per existing tax rates.
| Partic-ulars | Old | New | Old | New | Old | New | Old | New | Old | New | Old | New |
| Salary | 500 000 | 500 000 | 750000 | 750 000 | 1000 000 | 1000 000 | 1250 000 | 1250 000 | 15 Lakh | 15 Lakh | 20 lakh | 20 lakh |
| Less: Dedu-ctions | ||||||||||||
| HRA | 25000 | – | 75000 | – | 100000 | – | 125000 | – | 150000 | – | 200000 | – |
| Standard Dedu-ctions | 50000 | – | 50000 | – | 50000 | – | 50000 | – | 50000 | – | 50000 | – |
| LTA | 27500 | – | 62475 | – | 83300 | – | 104125 | – | 124950 | – | 166600 | – |
| Interest on Home Loan | 50000 | – | 75000 | – | 100000 | – | 125000 | – | 150000 | – | 200000 | – |
| 80C | 25000 | – | 100000 | – | 150000 | – | 150000 | – | 150000 | – | 150000 | – |
| 80D Medical | 10000 | – | 25000 | – | 25000 | – | 25000 | – | 25000 | – | 25000 | – |
| Net taxable income | 312 500 | 500 000 | 362525 | 750 000 | 491700 | 1000 000 | 670875 | 1250 000 | 850 050 | 15 Lakh | 1208400 | 20 Lakh |
| Tax | 3125 | 12500 | 5626 | 37500 | 12085 | 75000 | 46675 | 125000 | 82510 | 187 500 | 175020 | 337500 |
| Rebate u/s 87A | 3125 | 12500 | 5626 | – | 12085 | – | – | – | – | – | – | – |
| Net Tax Payable | – | – | – | 37500 | – | 75000 | 46675 | 125000 | 82510 | 187 500 | 175020 | 337500 |
| Add: Cess @ 4% | – | – | – | 1500 | – | 3000 | 1867 | 5000 | 3300 | 7500 | 7001 | 13500 |
| Total Tax payable | – | – | – | 39000 | – | 78000 | 48542 | 130000 | 85810 | 195 000 | 182021 | 351000 |
New tax rate u/s 115BAC are optional for individuals who wants to avail deductions/exemption can choose to tax under existing rates. Also, there has been no changes in section 87A i.e. there is no tax for individuals earning taxable income up to INR 5,00,000 under both regime.
