Know Your Income Tax: What will be your tax liability on salary of Rs 7.50 lakh, Rs 15 lakh, Rs 22.5 lakh or Rs 30 lakh?

Income Tax Calculations for New vs Old Tax Regime: The proposed new tax regime is all set to come into effect on April 1, 2025.

The new system will be applicable for the financial year 2025-26.

For the current financial year (2024-25), taxpayers can file their return as per the old tax regime and the existing new tax regime.

The ITR filing can most likely start in June.

Though the existing tax regime is the default regime for new taxpayers, they can still switch to any regime between the old and the new.

But whatever tax regime you opt for this financial year or the next financial year, do you know your income tax liability for annual incomes of Rs 7.50 lakh, Rs 13 lakh, Rs 15 lakh, Rs 22.5 lakh, Rs 30 lakh, and Rs 37.5 lakh?

Let's read the article to know!

Existing new tax regime  

In the existing tax regime, tax starts from the Rs 3 lakh income slab.

After a tax rebate of Rs 25,000 under Section 87A, income up to Rs 7 lakh is tax-free for resident individuals (not applicable for NRIs).

A standard deduction of Rs 75,000 is applicable for salaried individuals, increasing their tax-free limit by the same amount.

Taxpayers need to pay 15 per cent tax on income of Rs 10 lakh-12 lakh, 20 per cent on Rs 12 lakh-Rs 15 lakh income, while the tax slab of 30 per cent starts from Rs 15 lakh income.

Old tax regime 

Most taxpayers have shifted to the new tax regime, but many still follow the old regime.

The regime offers tax-free income up to Rs 5,00,000 after a tax rebate of Rs 12,500.

There is a 20 per cent tax on income above Rs 5,00,000, while the 30 per cent tax slab starts from Rs 10,00,000 income.

The attraction of the old tax regime is tax benefits such as those under Section 80C of the Income Tax Act, 1961.

Proposed new tax regime

Finance minister Nirmala Sitharaman announced changes in the new tax regime in Budget 2025, making an income up to Rs 12,00,000 tax-free for non-salaried individuals.

The maximum tax rebate limit was increased from Rs 25,000 to Rs 60,000.

Salaried-class individuals will get a standard deduction of Rs 75,000, so their income up to Rs 12,75,000 will be tax-free.

The regime will provide marginal relief to taxpayers whose income crosses the tax-free limit marginally. In such a case, their tax won't be more than the incremental income.

Income tax calculations 

We will calculate income tax liabilities for salaried-class taxpayers earning Rs 7.50 lakh, Rs 13 lakh, Rs 15 lakh, Rs 22.5 lakh, Rs 30 lakh, and Rs 37.5 lakh a year.

We will not take any deduction for our calculations and will apply a rebate, standard deduction, and marginal relief for calculations.

Income tax on Rs 7.50 lakh income

Existing new tax regime- 0  
Old tax regime- Rs 54,600
Proposed new tax regime- 0

Income tax on Rs 13 lakh income

Existing new tax regime- Rs 88,400  
Old tax regime- Rs 1,95,000
Proposed new tax regime-  Rs 26,000

Income tax on Rs 15 lakh income

Existing new tax regime- Rs  1,30,000
Old tax regime- Rs 2,57,400
Proposed new tax regime- Rs 97,500 

Income tax on Rs 22.5 lakh income

Existing new tax regime- Rs 3,56,200 
Old tax regime- Rs 4,91,400
Proposed new tax regime- Rs 2,53,500

Income tax on Rs 30 lakh income

Existing new tax regime- Rs 5,90,200 
Old tax regime- Rs 7,25,400
Proposed new tax regime- Rs 4,75,800
  

Income tax on Rs 37.50 lakh income

Existing new tax regime- Rs 8,24,200  
Old tax regime- Rs 9,59,400
Proposed new tax regime- Rs 7,09,800