Tax Slabs Old Vs New

February 12, 2020
AIATInstitute

1. New Tax Slabs vs Old Tax Slabs
A new (and optional) tax slab is introduced now which has lower tax rates compared to old one. The
investor will have choice of either staying with the old slabs along with various exemptions and
deductions they used to enjoy, or they can shift to new slabs without any exemptions/deductions.

New Income tax slab rates

Tax Slab
Tax Rate
Below 2.5 Lacs

No Tax

2.5 Lacs- 5.0 Lacs

5%

5.0 Lacs- 7.5 Lacs

10%

7.5 Lacs – 10.0 Lacs

15%

10.0 Lacs – 12.5 Lacs

20%

12.5 Lacs – 15.0 Lacs

25%

Above 15 Lacs

30%

Education cess @4% on the tax amount
Surcharge of 10% applicable if income > 50 Lacs and 15% if income > 1 Cr
Old Income tax slab rates (for those below 60 yrs.)

Tax Slab
Tax Rate
Below 2.5 Lacs

No Tax

2.5 Lacs- 5.0 Lacs

5%

5.0 Lacs- 10 Lacs

20%

Above 10 Lacs

30%

Which tax slab is better?

Basically the new tax slabs are of not much to those who take benefit of various deductions and
benefits anyways, because they are able to bring down their taxable income by some decent margin.
Only those who have income range of 6-9 lacs and do not take benefit of any exemption/deduction
will benefit from the new slabs.

Example 1 – Let’s see an example here and calculate the tax to be paid under old and new system.

Income : Rs 15,00,000
80C – Rs 1,50,000
Home Loan Interest – Rs 2,00,000
Medical Insurance – Rs 20,000
Standard Deduction – Rs 50,000
Calculation of Tax under OLD SLABS

You can see that here, the taxable income will come down by 4.2 lacs directly. So under the old slab
system, the taxable income will be Rs 10.8 Lacs (15 lacs – 4.2 lacs)

Let’s see tax calculations

Slab

Slab Higher Amount

Income Tax Rate

Taxable Income under Slab

Tax

0 – 2.5 Lacs

250000

0%

250000

0

2.5 – 5 lacs

500000

For Accounting and Taxation training in Nagpur.

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