We discover out what share of our revenue we pay as tax within the new tax regime. Take, for instance, a salaried tax-payer with an revenue of Rs. 11 Lakhs. After accounting for the usual deduction of Rs. 75,000, the online taxable revenue is Rs. 10.25 Lakhs.
We won’t contemplate every other deductions (like NPS employer contributions). Even when there have been, one can assume the online taxable revenue components in these deductions whereas utilizing the desk and chart under.
Rs. 10.25 Lakhs fall within the 15% slab. This doesn’t imply 15% of Rs. 10.25 Lakhs is paid as tax. Right here is how the tax is computed. You need to use our free New Tax Regime vs Previous Tax Regime Calculator to find out the tax payable.
These are the brand new tax regime slab charges from 1st April 2024.
- Upto ₹ 3 lakh Nil
- ₹ 3 lakh – ₹ 7 lakh 5%
- ₹ 7 lakh – ₹ 10 lakh 10%
- ₹ 10 lakh – ₹ 12 lakh 15%
- ₹ 12 lakh – ₹ 15 lakh 20%
- Greater than ₹ 15 lakh 30%
For a internet taxable revenue of Rs. 10.25 Lakhs, we have now
- The primary Rs. 3 lakhs is tax-free.
- The following Rs. 4 lakhs is taxed at 5% = Rs. 20,000
- The following Rs. 3 lakhs is taxed at 10% = Rs. 30,000
- The remaining Rs. 25,000 is taxed at 15% = Rs. 3750
So, the entire tax (earlier than cess) is Rs. 53,570. The cess is 4% of Rs. 53,570 = Rs. 2150.
So, the entire tax to be paid is Rs. 55,900. The whole tax, when divided by the entire revenue or Rs. 55,900/Rs. 11,00,000 = 5.08%. So, it’s grossly incorrect (at the very least for lower-income slabs) to say, “I’m within the 15% slab, so I pay 15% tax on my whole revenue”.
Because the revenue will increase, this share will increase and reaches the slab price. For instance, for an revenue of Rs. 16 lakhs, the tax/revenue share is 9.6% (not 30%). This step by step will increase because the revenue will increase (as a consequence of surcharge), and for an revenue of Rs. 88 lakhs, it turns into 30%, matching the tax slab, step by step growing additional for increased revenue till reaching a plateau of slightly over 38%
The jumps happen round Rs. 50 Lakhs, Rs. 100 Lakhs and Rs. 200 Lakhs.
The desk reveals consultant values.
| Taxable Earnings | Tax/revenue |
| 7,75,000 | 0.00% |
| 8,00,000 | 2.93% |
| 10,00,000 | 4.42% |
| 15,00,000 | 8.67% |
| 25,00,000 | 17.37% |
| 35,00,000 | 21.32% |
| 50,00,000 | 24.28% |
| 75,00,000 | 29.25% |
| 1,00,00,000 | 30.52% |
| 1,51,00,000 | 33.25% |
| 2,00,00,000 | 33.89% |
| 2,50,00,000 | 37.27% |
| 3,00,00,000 | 37.56% |
| 3,50,00,000 | 37.77% |
| 4,00,00,000 | 37.92% |
| 4,00,25,000 | 37.92% |
| 4,00,50,000 | 37.92% |
| 4,00,75,000 | 37.92% |
| 5,00,00,000 | 38.14% |
You need to use our free New Tax Regime vs Previous Tax Regime Calculator to find out the tax it’s worthwhile to pay
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