Which Tax Regime Should I Choose ? Old Tax Regime vs New Tax Regime
The Old Tax Regime vs New Tax Regime refer to two different systems for calculating income tax in India.
The Union Budget 2023 brought major changes in the Income Tax Rates.
So, now which tax regime would be better for your income level. Let’s find out.
Income Tax Calculation
If your Income is: up to 10 lakhs
Then, if you choose Old Tax Regime you can take tax benefit of up to: Rs 2,10,000
If your Income is : up to 15 lakhs
Under Old Tax Regime you can take tax benefit of up to: Rs 3,25,000
If your Income is : more than 15 lakhs
The Old Tax Regime can give tax benefit of up to: Rs 4,25,000
If currently you are taking lower tax benefit than the one specified above, then choose New Tax Regime
Old Tax Regime
The Old Tax Regime has been in place for many years and allows for various deductions and exemptions, which can be claimed to reduce taxable income. However, it has higher tax rates compared to the New Tax Regime.
New Tax Regime
The New Tax Regime was introduced in 2020 and offers lower tax rates without any deductions or exemptions. Taxpayers can choose between the Old and New Tax Regime depending on their preference and tax savings.
In general, the New Tax Regime is more beneficial for those who do not have many deductions or exemptions. While the Old Tax Regime can be more advantageous for those who have significant investments and expenses that qualify for tax deductions.
Which Tax Regime is Better for me ?
The decision of choosing between the Old Tax Regime and New Tax Regime depends on various factors such as your income level, investment options, tax-saving opportunities, etc.
If you have a high income and can avail of several deductions and exemptions under the Old Tax Regime, it may be more beneficial to continue with the Old Tax Regime.
However, if you do not have many deductions and exemptions, the New Tax Regime may be a better choice as it offers lower tax rates and simpler tax calculations.
Therefore, it is recommended that you consult a tax professional to assess which regime would be more beneficial for you based on your specific financial situation.