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Income Tax efiling in India for FY 2023-24 (AY 2024-25)

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Compare Tax under Existing & New Regime - Disclaimer:

This calculator is intended to provide a basic overview of the limited impact of new provisions. See Income Tax Offices to find the actual offer and eligibility.

All tax statistics (including expiration) do not include additional charges and the appropriate full exemption / reduction is considered Zero in New Regime.

  • Does not apply to any Revenue with special prices.
  • The draw and the release are as valid as the old empire.

Compare Tax under Existing & New Regime

ITR file upload time has arrived. This is the first year of choice, between the old tax regime with deductions and exemptions and the new tax regime with no exemptions and exemptions but with low slab rates, while you are submitting your ITR. Taxpayers are confused about which one to choose. Let's talk more about state symbols.

What the new tax regime provides

The option of a new tax regime is available to all people and HUFs. This can be selected. Under the new state tax is payable at low income levels of up to Rs. 15 lakh compared to the old empire. Under the new regime the slabs tax rates of 5%, 10%, 15%, 20% and 25% apply to each successive growth of Rs. 2.50 lakh from the basic release of Rs. 2.5 lakh up to 15 lakhs of total amount.
If you wish to elect a New tax regime you must renounce the various tax exemptions and exemptions available otherwise under the old regime. Under the new tax regime, low-income earners are not able to get major benefits such as regular deductions, House Rent Allowance (HRA), Leave Travel Assistance (LTA) and other approved grants. Various deductions such as those available under Section 80 C (with various items such as EPF, LIP, School Fees, PPF, NSC, ELSS, home loan repayments etc), 80D (premium insurance health), 80 CCD (1) & 80 CCD (1B) (NPS) will also not be available in both categories of taxpayers i.e. self-employed and self-employed. It also loses interest on mortgage loan claims and initiates or perpetuates losses in respect of disposable property. And you will not be able to set any losses brought forward earning the current income under the new system.
The 2020 budget saw Finance Minister Nirmala Sitharaman announce a new tax regime with more tax slabs and lower tax rates. This past was much sought after by taxpayers, but it came with the arrest of all deductions and exemptions available under the old tax regime.
Adding to the confusion, the finance minister gave taxpayers the opportunity to choose between a new government and an existing one, leaving it up to them to decide what they would prefer. All of these things work together, instead of simplifying tax laws, they are now more complex.
And if you are wondering how you can figure out if you should choose a new or new tax regime, this blog answers that question. We look at the new government in detail, its benefits and compare it with the existing tax system. So let's get started.

Old Tax Regime – High Rates but Lot of Options to Reduce Taxes

The current tax system is complicated to say the least. While tax rates are high, there are many ways to reduce your tax debt.
Over the years the government, by inserting clauses in the Income Tax Act, has given Indian taxpayers more than 70 exemption and deduction options with which they can defer their income and pay less.
While exemptions are part of your income, such as House Rent Allowance (HRA) and Leave Travel Allowance (LTA), deductions allow you to lower your tax rate by investing, saving or using certain items. The largest deduction is 80c where you can deposit your tax-free income at Rs.1.5 lakh. Apart from this, there are a few other categories that allow you to deduct tax deductions on items ranging from your loan interest (home and education) to the premiums you pay for health insurance.

Tax Slabs and Rates under the New Regime

Exemptions are granted to people earning up to Rs. 5 lakh remains the same. Below is a table with old and new tax rates as applicable to annual income:

Annual Income (Rs.) Old Tax Rate New Tax Rate
Up to Rs. 2.5 lakhs Nil Nil
Rs. 2.5 lakhs to Rs. 5 lakhs 5% 5%
Rs. 5 lakhs to Rs. 7.5 lakhs 20% 10%
Rs. 7.5 lakhs to Rs. 10 lakhs 20% 15%
Rs. 10 lakhs to Rs. 12.5 lakhs 30% 20%
Rs. 12.5 lakhs to Rs. 15 lakhs 30% 25%
Rs. 15 lakhs and above 30% 30%

Things to consider:

  • The new values ​​mentioned above are not deducted under the various categories of Chapter VI-A.
  • If the taxpayer wants to deduct Rs. 2.5 lakhs (standard deduction of Rs. 50,000, Rs. 1.5 lakhs u / s 80C and investment in NPS of Rs. 50,000), the tax will remain the same as the old one.
  • In the event of a dispute over interest on a mortgage loan. Exemption for 2 lakhs or for HRA, the old tax rate would be Rs. Less than 46,800 is the new state.

Frequently asked questions

Under the current regime taxpayers (Individuals and HUFs) were taxed @ 20% of the taxable income in the range of Rs 5 lakh to Rs 10 lakh. The government was expected to reduce tax rates as they were too high.
Existing Regime
Net Income Range Rate of Income Tax
Upto Rs.2,50,000 ___
Rs.2,50,000 to RS.5,00,000 5%
Rs.5,00,000 to Rs.10,00,000 20%
Above Rs.10,00,000 30%
The Finance Minister in the Union Budget 2020 announced a new tax regime.
New Regime u/s. 115BAC
Total Income Rate of Income Tax
Upto Rs.2,50,000 ___
From Rs.2,50,001 to Rs.5,00,000 5%
From Rs.5,00,001 to Rs.7,50,000 10%
From Rs.7,50,001 to Rs.10,00,000 15%
From Rs.10,00,001 to Rs.12,50,000 20%
From Rs.12,50,001 to Rs.15,00,000 25%
Above 15,00,000 30%

Under the current tax system the rates are higher but there are many ways to reduce your tax debt. There are more than 70 exemptions and debit options paid by taxpayers with which they can reduce their income and pay less.
The new tax regime has a lot of slabs and low taxes but there are not many ways to reduce taxes i.e. by seeking a reduction and exemption as the taxpayer has to give up 70 tax deductions and exemptions.
If taxpayers want to choose a new tax regime, they must scrutinize both governments. The tax department has developed a tax comparison service, which is available on their web portal which each taxpayer can use to determine which method is best for him or her. The link to the same is as under:

    The following are the deductions and exemptions you cannot claim under the new tax system

  • The standard deduction, professional tax and entertainment allowance on salaries
  • Leave Travel Allowance (LTA)
  • House Rent Allowance (HRA)
  • Minor child income allowance
  • Helper allowance
  • Children education allowance
  • Other special allowances [Section10(14)]
  • Interest on housing loan on the self-occupied property or vacant property (Section 24)
  • Chapter VI-A deduction (80C,80D, 80E,80CCC, 80CCD, 80D, 80DD, 80DDB,, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc) (Except Section 80CCD(2) and 80JJAA)
  • Without exemption or deduction for any other perquisites or allowances
  • Deduction from family pension income

In case of a self-occupied property, the new tax regime does not allow to claim a deduction on interest for a housing loan. The deduction of Rs 2 lakh allowed in the existing system is not available in the new tax regime.
Also, the set-off of the loss of Rs 2 lakh from house property from salary income is not allowed.In case of let-out a house property, the deductions on municipal tax, standard deduction of 30% and interest paid on housing loan is restricted till the rental income. Therefore, the excess interest paid on housing loan will result in loss under the head income from house property. However, this loss cannot be set-off against any other head of income. Also, you cannot carry forward the loss from house property to future years for set off.

Krishna Gopal Varshney

Krishna Gopal Varshney co-founder & CEO of Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

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