Income Tax Breakdown: How Much Will You Pay On Salaries Of Rs 6.75 Lakh, Rs 9.25 Lakh, Rs 14.50 Lakh, Or Rs 18.50 Lakh In Old And New Tax Regimes?

As we approach the end of the financial year 2024-25, taxpayers need to file their Income Tax Returns (ITR) based on the old or new tax regimes. With the financial year 2025-26, the proposed new tax regime introduces new tax slabs. Salaried individuals can choose the regime that suits them best, based on their income and investments. This gallery will break down how much tax you would need to pay depending on your income under both the old and new tax systems.

 

In India, there are two primary tax regimes:

- Old Tax Regime: This allows various exemptions and deductions like House Rent Allowance (HRA) and 80C deductions. Although the tax rates are higher, these exemptions make it a favorable option for many taxpayers who claim deductions.

- New Tax Regime: Introduced in 2020, this regime offers lower tax rates but does not allow deductions or exemptions. It’s simpler, making it easier for taxpayers who do not have many deductions to claim.

- Proposed New Tax Regime (for 2025-26): This version of the new regime increases the tax-free income limit, making it more attractive for salaried individuals.

Each tax regime has different tax-free income limits:

Old Tax Regime: Income up to Rs 5,00,000 is tax-free after a standard deduction of Rs 50,000 and a rebate.

New Tax Regime: Income up to Rs 7,00,000 is tax-free, thanks to a higher standard deduction of Rs 75,000.

Proposed New Tax Regime: Announced in the 2025 Budget, this regime raises the tax-free limit for salaried individuals to Rs 12,75,000, allowing more people to avoid paying taxes altogether.

For those earning Rs 6.75 lakh, here’s how the tax differs under each regime:

Old Tax Regime: The tax payable would be Rs 39,000.

New Tax Regime: No tax is payable as it falls under the Rs 7,00,000 tax-free limit.

Proposed New Tax Regime: Again, no tax is payable as the income is below the Rs 12,75,000 tax-free limit.

In all three regimes, if your income is Rs 6.75 lakh, you won’t need to pay much tax, with the new regime offering a clear benefit for middle-income earners.

 

For those earning Rs 9.25 lakh annually:

Old Tax Regime: The tax payable is Rs 1,01,400, considering deductions and exemptions available.

New Tax Regime: The tax payable would be Rs 41,600, as the new tax rates would apply.

Proposed New Tax Regime: Under the proposed tax regime, no tax would be payable because the income is below the Rs 12,75,000 tax-free limit.

The proposed tax regime benefits the salaried class, especially for those earning in the Rs 9 lakh range, making the tax burden lighter.

 

For individuals with an income of Rs 12.50 lakh:

Old Tax Regime: The tax payable is Rs 1,79,400.

New Tax Regime: The tax payable under this regime would be Rs 79,300.

Proposed New Tax Regime: The tax payable would be Rs 0, as the income falls below Rs 12,75,000 in the new proposed regime.

This scenario highlights the advantage of the new proposed tax regime for middle-income earners, significantly reducing their tax liability.

 

For an income of Rs 14.50 lakh:

Old Tax Regime: The tax payable would be Rs 2,41,800.

New Tax Regime: The tax payable under the new regime would be Rs 1,19,600.

Proposed New Tax Regime: The tax payable under the proposed new tax regime would be Rs 89,700.

At this income level, the new tax regime offers considerable savings compared to the old tax regime, but the proposed tax regime still offers an advantage, lowering the tax payable even further.

 

For a higher income of Rs 18.50 lakh:

Old Tax Regime: The tax payable would be Rs 3,66,600.

New Tax Regime: Under this regime, the tax payable would be Rs 2,31,400.

Proposed New Tax Regime: The tax payable would be Rs 1,61,200.

While the tax burden is high, the new proposed tax regime still offers better tax relief compared to the older options.

 

For those earning Rs 24 lakh annually:

Old Tax Regime: The tax payable would be Rs 5,38,200.

New Tax Regime: The tax payable under the new regime would be Rs 4,03,000.

Proposed New Tax Regime: The tax payable would be Rs 2,92,500 under the proposed new tax regime.

This demonstrates how the tax burden increases significantly for high earners, but the proposed new tax regime helps reduce the overall liability.

 

For the highest income bracket of Rs 30 lakh:

Old Tax Regime: The tax payable would be Rs 7,25,400.

New Tax Regime: The tax payable would be Rs 5,90,200.

Proposed New Tax Regime: The tax payable under the proposed new regime would be Rs 4,75,800.