Which is better- the old or new tax regime? With Auto Calculate Income Tax Preparation Excel Based Software All in One for the Non Government (Private) Employees for the F.Y.2023-24 and A.Y.2024-25

 Which is better- the old or the new tax regime? The Budget 2023 for the current financial year brought

 a major change for the assessee by introducing the new tax regime as voluntary compliance for all

 taxpayers.

 Although a private individual can choose to switch to the old tax regime if he/she wishes. There are

 advantages and disadvantages to both the old tax regime and the new tax regime, but it can be

 confusing for taxpayers to choose the most appropriate regime for themselves. Let us examine the

 various aspects to be considered in the old tax regime and the new tax regime in F.Y 2023-24.

You may also like- At a time 50 Employees Auto Calculate and automatic Preparation Income Tax Form 16 Part B for the Financial Year 2022-23 and Assessment Year 2023-24

Under the new tax regime

 

The new tax regime has increased the range of tax rates from 0% to 30% with a minimum exemption of up to Rs 3 lakhs and the maximum tax rate of 30% applicable from Rs.15 lakhs. The new income tax rates are listed below:

 

INCOME TAX SLAB RATES IN THE NEW TAX REGIME 2023-24

ANNUAL INCOME	NEW TAX REGIME
0-3 Lakhs	Nil
3-6 Lakhs	5%
6-9 Lakhs	10%
9-12 Lakhs	15%
12-15 Lakhs	20%
Above 15 Lakhs	30%

 

Highlights of the New Tax Regime 2023-24

 

1. The new tax regime is voluntary compliance for the year 2023-24.

2. A person earning Rs. 7 without annual entitlement to abatement.

3. Higher rate of surcharge on income above Rs. 5 crores reduced from 37% to 25%.

4. In order to simplify complicated paperwork and reduce the burden of compliance and administration on the taxpayer and tax authorities regarding tax deductions and exemptions, fewer deductions were made.

5. Some tax deductions not allowed under the new tax regime are available

A. Waiver of Travel Allowance

B. Rental Assistance

C. Educational Assistance for Children

D. Exemption for employment taxes

E. Interest on home loans

F. Deduction for specified

6. No stringent rules and regulations for your investments under the new tax regime.

You may also like- At a time 50 Employees Auto Calculate and automatic Preparation Income Tax Form 16 Part A&B for the Financial Year 2022-23 and Assessment Year 2023-24

 Comparison between the old tax regime and new tax regime

As announced in the 2023-24 investment budget, the new tax regime has been imposed by default, but still an individual can choose between the old tax regime and the new tax regime if he/she wishes. If you want to claim deductions and exemptions, the old tax regime is more favorable, otherwise, the new tax regime has multiple levels of income brackets and rates.

 

The key point to understand here is which tax regime allows you to take home more money.

 

Let us take an example to understand the situation in both lights, Mr. Suresh earns Rs. 50,00,000 per annum. He is claiming a deduction under section 80C against LIC and EPF for Rs. 1,50,0 He has taken out health insurance for which he pays a premium of Rs 25,000 which he claims as tax deductible under section 80 D. He also claims a tax-free traveling allowance of Rs.38,000 and rent allowance of Rs. 1,60,0 Let’s calculate the tax due in both cases.

 

Understand with the help of illustration 1 of New and old tax regimes for taxpayers:-

Illustration	Old Tax Regime	New Tax Regime
Income From Salary	50,00,000	50,00,000
Less:- Exemptions House Rent Allowance Leave Travel Allowance	(1,60,000) (38,000)	Not Allowed Not Allowed
Gross Total Income	48,02,000	50,00,000
Less:- Standard Deduction	(50,000)	(50,000)
Less Deduction U/s Chapter VI-A (EPF +LIC+ Tuition Fees, etc)	(1,50,000)	Not Allowed
Less:- Deduction U/s 80D If Senior Citizen -Rs 50000 otherwise Rs. 25000 Maximum Allowed.	(25,000)	Not Allowed
Less:- Other Deduction If any	Allowed	Not Allowed
Net Taxable Income	45,77,000	49,50,000

 

Note: - Assume that the taxpayer is less than 60 years of age.

 

 

B. Total taxes payable under the new and old tax regimes

 

Tax Calculation Slab	Old Tax Regime Rates	Tax (Old) Amount	Tax Calculation Slab	New Tax Regime Rates	Tax (New) Amount
0 – 2,50,000	0%	Nil	0 – 3,00,000	Nil	Nil
2,50,000 - 5,00,000	5%	12,500	3,00,000 - 6,00,000	5%	15,000
5,00,000 -10,00,000	20%	1,00,000	6,00,000 - 9,00,000	10%	30,000
Above 10,00,000	30%	10,73,100	9,00,000 - 12,00,000	15%	45,000
			12,00,000-15,00,000	20%	60,000
			Above 15,00,000	30%	10,35,000
Total Tax		11,85,600	Total Tax		11,85,000
Add: Higher Education Cess @4%		47,424	Add: Higher Education Cess @4%		47,400
Total Tax payable		12,33,024	Total Tax payable		12,32,400

 

As the example above shows, people take home more money under the new tax system, but the situation will be different if the amount of additional payments and deductions are higher. It is therefore advisable to calculate your tax due under both regimes. 

Download Automated Income Tax Preparation Excel-Based Software All in One for the Government & Non-Government (Private) Employees for the F.Y.2022-23 and A.Y.2023-24

 

Feature of this Excel Utility:-

 

1) This Excel utility prepares and calculates your income tax as per the New Section 115 BAC (New and Old Tax Regime)

 

2) This Excel Utility has an option where you can choose your option as a New or Old Tax Regime

 

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4) Automated Income Tax Form 12 BA

 

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6) Automated Income Tax Revised Form 16 Part B for the F.Y.2023-24

7) Automated House Rent Exemption Calculation U/s 10(13A)