After the declaration of the finance bill, 2020 many queries are raised from the individuals regarding which is beneficial and which is not beneficial. Which option is to be chosen between both the regimes. Here is the compare old and new tax regime calculator.
↓Download Income tax New slab vs old slab rates F.Y.2020-21 (A.Y.2021-22)
new tax regime vs old tax regime
If the individual is not having any allowances or any particular deductions the new regime can opt as there will be no difference whether any deductions
Let us have an example for calculation of tax for an individual having an income of 15,00,000
if the individual opts for the old regime without deductions the following is the amount of tax(table 1).
if the individual opts for the new regime without deductions following is the amount of tax (table 2)
| Income | Old regime (Table 1) | New regime(Table 2) |
| Rs 2,50,000 | Nil | Nil |
| Rs 2,50,001 – 5,00,000 | 12,500 | 12,500 |
| Rs 5,00,000 – 7,50,000 | 50,000 | 25,000 |
| Rs 7,50,001 – 10,00,000 | 50,000 | 37,500 |
| 10,00,001 – 12,50,000 | 75,000 | 50,000 |
| 12,50,001 – 15,00,000 | 75,000 | 62,500 |
| Tax payable | 2,62,500 | 1,87,500 |
| Cess | 10,500 | 7,500 |
| Total Tax payable | 2,73,000 | 1,95,000 |
When there are no deductions the new regime is preferable if there are no deductions.
if the deductions are there I,e., deductions there
Example: Annual income 15,00,000, 80C 1,50,000, 80D 25,000, Housing loan interest 2,00,000.
Total Deductions amounting to Rs. 3,75,000 deducted from income comes to 11,25,000
| Income | Tax |
| 0-250000 | – |
| 2,50,000 – 5,00,000 | 12,500.00 |
| 5,00,000 – 10,00,000 | 1,00,000.00 |
| upto 11,25,000 | 37,500.00 |
| Total tax | 1,50,000 |
An individual opts for a new regime with deductions will pay tax more as the effect of the deductions will not be there in new regime.
There is a net tax benefit of Rs.45,000 in the old regime when the deductions can be availed by the individual.
By this, we can conclude that when deductions are there old regime is preferable when deductions are not there new regime is preferable.