Old vs New tax regime explained- Check which is better?

New Delhi: Taxpayers with an annual income of up to Rs 7 lakh will save Rs 33,800 in taxes after Finance Minister increased the rebate under the new income tax regime in Union Budget 2023.

However, the old income tax regime that comes with exemptions on certain investments and expenditures will remain attractive for taxpayers who pay house rent or have a home loan.

According to Deloitte India, Partner, Neeru Ahuja, individuals who get a house rent allowance (HRA) from their employer and pay rent for their accommodation are likely to pay lower taxes under the old tax regime.

In addition to HRA deductions, individuals can also claim a deduction on interest on their home loan under the old tax regime if the distance between the two accommodations is more than 40 kilometres, she said.

As per EY, after all possible deductions--HRA exemption, standard deduction, Professional tax, Section 80C, Section 80CCD(1B) and Section 80D, available under the old tax regime, an individual (up to 60 years) will have to pay tax as per the following chart:

Gross Income- Rs 7,00,000

Tax Payable:

As per the current Concessional tax regime Rs 33,800

As per the proposed Concessional tax regime Nil

As per the old tax regime Rs 22,901

Gross Income- Rs 10,00,000

Tax Payable:

As per the current Concessional tax regime Rs 78,000

As per the proposed Concessional tax regime Rs 54,600

As per the old tax regime Rs 31,221

Gross Income- Rs 20,00,000

Tax Payable:

As per the current Concessional tax regime Rs 3,51,000

As per the proposed Concessional tax regime Rs 2,96,400

As per the old tax regime Rs 22,901

Gross Income- Rs 35,00,000

Tax Payable:

As per the current Concessional tax regime Rs 8,19,000

As per the proposed Concessional tax regime Rs 7,64,000

As per the old tax regime Rs 7,26,211

Gross Income- Rs 55,00,000

Tax Payable:

As per the current Concessional tax regime Rs 15,87,300

As per the proposed Concessional tax regime Rs 15,27,240

As per the old tax regime Rs 15,69,316

For Senior Citizens between age of 60-80 years:

Gross Income- Rs 7,00,000

Tax Payable:

As per the current Concessional tax regime Rs 33,800

As per the proposed Concessional tax regime NIL

As per the old tax regime Rs 20,301

Gross Income- Rs 10,00,000

Tax Payable:

As per the current Concessional tax regime Rs 78,000

As per the proposed Concessional tax regime Rs 54,600

As per the old tax regime Rs 28,621

Gross Income- Rs 20,00,000

Tax Payable:

As per the current Concessional tax regime Rs 3,51,000

As per the proposed Concessional tax regime Rs 2,96,400

As per the old tax regime Rs 28,621

Gross Income- Rs 35,00,000

Tax Payable:

As per the current Concessional tax regime Rs 8,19,000

As per the proposed Concessional tax regime Rs 7,64,400

As per the old tax regime Rs 7,23,611

Gross Income- Rs 55,00,000

Tax Payable:

As per the current Concessional tax regime Rs 15,87,300

As per the proposed Concessional tax regime Rs 15,27,240

As per the old tax regime Rs 15,66,456

For Super Senior Citizen (above 80 years):

Gross Income- Rs 7,00,000

Tax Payable:

As per the current Concessional tax regime Rs 33,800

As per the proposed Concessional tax regime NIL

As per the old tax regime Rs 9,901

Gross Income- Rs 10,00,000

Tax Payable:

As per the current Concessional tax regime Rs 78,000

As per the proposed Concessional tax regime Rs 54,600

As per the old tax regime Rs 18,221

Gross Income- Rs 20,00,000

Tax Payable:

As per the current Concessional tax regime Rs 3,51,000

As per the proposed Concessional tax regime Rs 2,96,400

As per the old tax regime Rs 2,77,971

Gross Income- Rs 35,00,000

Tax Payable:

As per the current Concessional tax regime Rs 8,19,000

As per the proposed Concessional tax regime Rs 7,64,400

As per the old tax regime Rs 7,13,211

Gross Income- Rs 55,00,000

Tax Payable:

As per the current Concessional tax regime Rs 15,87,300

As per the proposed Concessional tax regime Rs 15,27,240

As per the old tax regime Rs 15,55,016.