The Finance minister in her budget speech highlighted that tax burden on a person earning Rs. 15 lakhs shall be reduced by Rs. 78,000. However, this situation will rarely arise as a tax saving of Rs. 78,000 arises only when the assessee has not been availing any exemption or deduction in the current regime. We have analysed the following situation to understand the implications of this New Tax Regime of Section 115BAC:
Income |
Tax Liability under New Tax Regime of Section 115BAC |
Tax liability
under Old Tax Regime |
Net Tax
Saving |
6,00,000 |
23,400 |
33,800 |
10,400 |
7,00,000 |
33,800 |
54,600 |
20,800 |
8,00,000 |
46,800 |
75,400 |
28,600 |
9,00,000 |
62,400 |
96,200 |
33,800 |
10,00,000 |
78,000 |
1,17,000 |
39,000 |
11,00,000 |
98,800 |
1,48,200 |
49,400 |
12,00,000 |
1,19,600 |
1,79,400 |
59,800 |
12,50,000 |
1,30,000 |
1,95,000 |
65,000 |
13,00,000 |
1,43,000 |
2,10,600 |
67,600 |
14,00,000 |
1,69,000 |
2,41,800 |
72,800 |
15,00,000 |
1,95,000 |
2, 73,000 |
78,000 |
The above table shows that it is beneficial to opt for the New Tax Regime of Section 115BAC if Individual is not eligible for any Deduction. |
