Old Vs New Tax Regime – Which is Better for salaried employee
Employees have to declare the TAX REGIME to their employer
Every employer must be asking their employee these days for a suitable scheme of Tax viz the OLD TAX Regime or NEW TAX Regime. Employees must declare the scheme to the employer as soon as possible to deduct TDS accordingly from their salary.
As we all are aware the Budget announced on 1st February 2023 brings a lot of change in the slab rates where Assessee would be able to select a new tax regime with reduced slab rates of taxes but he would not be able to claim the deductions which were otherwise allowed in the old tax regime. Accordingly, we have prepared tables that will help you to select the best regime for yourself.
In the old tax regime, slab rates of tax are as follows:
| Slabs of Income (Rs.) | Rate of tax |
| 0 – 2.5 Lakhs | 0% |
| 2.5 Lakhs – 5 Lakhs | 5% |
| 5 Lakhs – 10 Lakhs | 20% |
| > 15 Lakhs | 30% |
No Income tax up to Rs.5 Lakhs in the Old regime due to the Rebate available.
New tax slab rates prescribed in New Tax Regime are:
| Slabs of Income (Rs.) | Rate of tax |
| 0 – 3 Lakhs | 0% |
| 3 Lakhs – 6 Lakhs | 5% |
| 6 Lakhs – 9 Lakhs | 10% |
| 9 Lakhs – 12 Lakhs | 15% |
| 12 Lakhs – 15 Lakhs | 20% |
| > 15 Lakhs | 30% |
No Income tax up to Rs.7 Lakhs in New Regime due to the Rebate available.
Based on the data we have provided, you can select the best tax regime for yourself which means that you can select the regime in which you have lower tax liability.
| Income before Deductions | Deductions / Tax Saving Investments | Beneficial Regime |
| Less than 5 Lakhs | 0 | Old and New both will have no Tax Liability |
| Less than 7 Lakhs | 0 | The new Regime will have zero tax |
| Less than 10 Lakhs | 0 | The new Regime will have lower taxes as compared to the old tax regime |
| Income equal to 10 Lakhs | more than 2,62,500 | The old Tax Regime will be better |
| Income Equal to 10 Lakhs | less than 2,62,500 | The new Tax Regime will be better |
| Income Equal to 12 Lakhs | more than 3,00,000 | The old Tax Regime will be better |
| Income Equal to 12 Lakhs | less than 3,00,000 | The new Tax Regime will be better |
| Income Equal to 15 Lakhs | more than 3,58,000 | The old Tax Regime will be better |
| Income Equal to 15 Lakhs | less than 3,58,000 | The new Tax Regime will be better |
| Income Equal to 20 Lakhs | more than 3,75,000 | The old Tax Regime will be better |
| Income Equal to 20 Lakhs | less than 3,75,000 | The new Tax Regime will be better |