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Budget 2020: We calculated for you tax liability comparisons between new and old slabs

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According to the proposal, in the new tax regime, substantial tax benefit will accrue to a taxpayer depending upon exemptions and deductions claimed by him.

Budget 2020: We calculated for you tax liability comparisons between new and old slabs
Finance Minister Nirmala Sitharaman on Saturday proposed new personal income tax slabs in the Union Budget 2020. Under the new tax regime, 7 income slabs have been introduced and tax rates have been slashed on income up to Rs 15 lakh. The new tax regime will, however, be optional. This means taxpayers will be given the choice to either continue with the old tax regime with exemptions or opt the new reduced tax rates without exemptions.
According to the proposal, in the new tax regime, substantial tax benefit will accrue to a taxpayer depending upon exemptions and deductions claimed by him.
Health and education cess at the rate of 4 percent will be levied on the income tax plus surcharge wherever applicable.
Here are the new proposed income tax slabs:
Under the proposed I-T slab, annual income up to Rs 2.5 lakh is exempt from tax. Those individuals earning between Rs 2.5 lakh and Rs 5 lakh will pay 5 percent tax. Income between Rs 5 and 7.5 lakh will be taxed at 10 per cent, while those between Rs 7.5 and 10 lakh at 15 percent.
Those earning between Rs 10 and 12.5 lakh will pay tax at the rate of 20 percent, while those between Rs 12.5 and Rs 15 lakh will pay at the rate of 25 percent. Income above Rs 15 lakh will be taxed at 30 per cent.
Here's a difference in tax under old and new regime on same levels of income for individuals below 60 years of age:
When the gross income is Rs 7.5 lakh
A person earning Rs 7.5 lakh (assuming the individual is availing only deduction under Section 80C) will pay a tax of Rs 33,800. However, if the person enters the new regime, he will have to pay Rs 39,000 as tax, according to Amit Maheshwari, partner, Ashok Maheshwary Associates.
On the other hand, if the gross income is Rs 7.5 lakh (assuming the individual is not availing deductions), he will end up paying more tax in the old regime.
When the gross income is Rs 10 lakh
A person earning Rs 10 lakh (assuming the individual is availing only deduction under Section 80C) will pay a tax of Rs 85,800, as per the old regime.  Computation includes only deduction under Section 80C. However, if the person enters the new regime, he will have to pay only Rs 78,000 as tax, according to Maheshwari.
When the gross income is Rs 12.5 lakh
A person earning Rs 12.5 lakh (assuming the individual is availing only deduction under Section 80C) will pay a tax of Rs 1,48,200, as per the old regime. However, if the person enters the new regime, he will have to pay Rs 1,30,000 as tax.
When the gross income is Rs 15 lakh
A person earning Rs 15 lakh in a year and not availing any deductions etc. will pay only Rs, 1,95,000 as compared to Rs, 2,73,000 in the old regime. Thus, his tax burden shall be reduced by 78,000 in the new regime, according to a government's release.
However, if an individual earns Rs 15 lakh a year and is availing deductions, he would be paying Rs 1,52,880 in the old regime. His tax burden may increase if he opts for the new regime.
When the gross income is Rs 20 lakh
A person earning Rs 20 lakh (assuming the individual is availing only deduction under Section 80C) will pay a tax of Rs 3,82,200, as per the old regime. However, if the person enters the new regime, he will have to pay Rs 3,51,000 as tax, according to Maheshwari.
What experts suggest
With the optional new regime, Archit Gupta, Founder, and CEO, ClearTax said taxpayers will have to evaluate what works better for them.
"An individual who is currently availing more deductions and exemptions under the Income Tax Act may choose to avail them and continue to pay tax in the old regime," he said.
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