Tax Regime

The tax regime defines the tax slabs and rates. In 2020 the government introduced a new tax regime with higher tax rates but more options for tax savings. The new tax regime also gives taxpayers the option to select either old or new regimes making taxation all the more complicated. While figuring out what option to go for might look complicated, if you approach it systematically, it is not that difficult to figure out.

  • Calculate all the exemptions available
  • Check out the deductions that you can claim

Accordingly, different taxpayers will benefit differently under the 2 tax regimes. One thing that taxpayers need to be careful of is tax regimes should not take precedence over life goals. For instance, it is you who should decide whether to invest your money or to go for insurance depending on your needs.

Current Tax Regime Table 

The current tax regime table is as follows: 

Old Tax Regime (With deductions and exemptions) Total Income New Tax Regime (Without deductions and exceptions) 
Nil Up to Rs. 2.5 Lakh Nil 
5% From Rs 2,50,001 to Rs 5 Lakh 5% 
20% From Rs 5,00,001 to Rs 7.5 Lakh 10% 
From Rs 7,50,001 to Rs 10 Lakh 15% 
30% From Rs 10,00,001 to Rs 12.5 Lakh 20% 
From Rs 12,50,001 to Rs 15 Lakh 25% 
From Rs 15,00,001 and above 30% 

Frequently Asked Questions

Which Tax Regime is better? 

There is no easy way to answer this, as taxpayers will need to evaluate and compare both the tax regimes and then decide which one to choose. But keeping in mind multiple factors like investment in tax savings instruments, it’s better to opt for the old tax regime as it offers benefit of deduction/exemption. 

How to opt for New Tax Regime? 

To opt for the New Tax Regime, individuals with business income will have to fill Form 10IE only once in their lifetime. While salaried individuals will have to file Form 10IE every year to continue with the New Tax Regime. 

cookie image

By clicking “Accept", you consent to our website's use of cookies to give you the most relevant experience by remembering your preferences and repeat visits. You may visit "cookie policy” to know more about cookies we use.