Jigar M. Patel
International Tax Attorney
- Tax Relief of Zero Tax can be enjoyed on account of tax Rebate u/s. 87A, which is applicable only in case of Resident Individuals
- NRIs, HUFs and AOPs not entitled to tax rebate
- As per interpretation of Income-tax Department, tax rebate cannot be enjoyed in respect of income attracting special rates viz. STCG from equity u/s. 111A and LTCG on non-equity u/s. 112
| COMPARISON OF TAX LIABILITY IN CASE OF RESIDENT INDIVIDUAL As Per Old Regime, Existing New Regime and Proposed New Regime as per Budget | |||||
| Total Income (in Rs.) | Tax under Old Regime (a) | Tax under Existing New Regime (b) | Tax under Proposed New Regime as per Budget (c) | Budget Benefit in comparion to Existing New Tax Regime [(c) – (b)] | Budget Benefit in comparison to Old Tax Regime [(c) – (a)] |
| 10,00,000 | 1,12,500 | 50,000 | Nil | 50,000 | 1,12,500 |
| 12,00,000 | 1,72,500 | 80,000 | Nil | 80,000 | 1,72,500 |
| 16,00,000 | 2,92,500 | 1,70,000 | 1,20,000 | 50,000 | 1,72,500 |
| 20,00,000 | 4,12,500 | 2,90,000 | 2,00,000 | 90,000 | 2,12,500 |
| 24,00,000 | 5,32,500 | 4,10,000 | 3,00,000 | 1,10,000 | 2,32,500 |
Time to Say Good Bye to the Old Tax Regime?
The tax comparison of the old vs. new as per the above Table clearly highlights that the tax department is virtually determined to pursuade taxpayers to say good-bye to the Old Tax Regime. It may not be a surprise if the New Income Tax Bill, proposed to be tabled next week, does not carry any whisper about the Old Tax Regime
Even NRIs, HUFs, AOPs & BOIs shall enjoy substantial Tax Benefit pursuant to the Rationalization of Tax Slabs as under:
| Existing New Tax Regime | Proposed New Tax Regime as per Budget, 2025 | ||
| Income Slab | Tax Rate | Income Slab | Tax Rate |
| 0 to 3 Lakhs | 0% | 0 to 4 Lakhs | 0% |
| 3 to 7 Lakhs | 5% | 4 to 8 Lakhs | 5% |
| 7 to 10 Lakhs | 10% | 8 to 12 Lakhs | 10% |
| 10 to 12 Lakhs | 15% | 12 to 16 Lakhs | 15% |
| 12 to 15 Lakhs | 20% | 16 to 20 Lakhs | 20% |
| Above 15 Lakhs | 30% | 20 to 24 Lakhs | 25% |
| Above 24 Lakhs | 30% | ||
