We discover out what proportion of our revenue we pay as tax within the new tax regime. Take, for instance, a salaried tax-payer with an revenue of Rs. 11 Lakhs. After accounting for the usual deduction of Rs. 75,000, the web taxable revenue is Rs. 10.25 Lakhs.
We won’t think about every other deductions (like NPS employer contributions). Even when there have been, one can assume the web taxable revenue components in these deductions whereas utilizing the desk and chart beneath.
Rs. 10.25 Lakhs fall within the 15% slab. This doesn’t imply 15% of Rs. 10.25 Lakhs is paid as tax. Right here is how the tax is computed. You should utilize our free New Tax Regime vs Previous Tax Regime Calculator to find out the tax payable.
These are the brand new tax regime slab charges from 1st April 2024.
- Upto ₹ 3 lakh Nil
- ₹ 3 lakh – ₹ 7 lakh 5%
- ₹ 7 lakh – ₹ 10 lakh 10%
- ₹ 10 lakh – ₹ 12 lakh 15%
- ₹ 12 lakh – ₹ 15 lakh 20%
- Greater than ₹ 15 lakh 30%
For a internet taxable revenue of Rs. 10.25 Lakhs, now we have
- The primary Rs. 3 lakhs is tax-free.
- The following Rs. 4 lakhs is taxed at 5% = Rs. 20,000
- The following Rs. 3 lakhs is taxed at 10% = Rs. 30,000
- The remaining Rs. 25,000 is taxed at 15% = Rs. 3750
So, the whole tax (earlier than cess) is Rs. 53,570. The cess is 4% of Rs. 53,570 = Rs. 2150.
So, the whole tax to be paid is Rs. 55,900. The full tax, when divided by the whole revenue or Rs. 55,900/Rs. 11,00,000 = 5.08%. So, it’s grossly incorrect (at the least for lower-income slabs) to say, “I’m within the 15% slab, so I pay 15% tax on my whole revenue”.
Because the revenue will increase, this proportion will increase and reaches the slab fee. For instance, for an revenue of Rs. 16 lakhs, the tax/revenue proportion is 9.6% (not 30%). This regularly will increase because the revenue will increase (as a consequence of surcharge), and for an revenue of Rs. 88 lakhs, it turns into 30%, matching the tax slab, regularly growing additional for larger revenue till reaching a plateau of a bit over 38%
The jumps happen round Rs. 50 Lakhs, Rs. 100 Lakhs and Rs. 200 Lakhs.
The desk reveals consultant values.
| Taxable Earnings | Tax/revenue |
| 7,75,000 | 0.00% |
| 8,00,000 | 2.93% |
| 10,00,000 | 4.42% |
| 15,00,000 | 8.67% |
| 25,00,000 | 17.37% |
| 35,00,000 | 21.32% |
| 50,00,000 | 24.28% |
| 75,00,000 | 29.25% |
| 1,00,00,000 | 30.52% |
| 1,51,00,000 | 33.25% |
| 2,00,00,000 | 33.89% |
| 2,50,00,000 | 37.27% |
| 3,00,00,000 | 37.56% |
| 3,50,00,000 | 37.77% |
| 4,00,00,000 | 37.92% |
| 4,00,25,000 | 37.92% |
| 4,00,50,000 | 37.92% |
| 4,00,75,000 | 37.92% |
| 5,00,00,000 | 38.14% |
You should utilize our free New Tax Regime vs Previous Tax Regime Calculator to find out the tax it is advisable pay
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