New Delhi: After the Lok Sabha elections in 2024 in the country, the full Union Budget was presented in the month of July. In this, Finance Minister Nirmala Sitharaman had announced many changes, which also included some changes in the new tax regime. Under the changes in the 2024-25 budget, the standard deduction was increased by Rs 25,000 to Rs 75,000, while the tax slab was also amended. At the same time, no amendment was made to the old tax regime. In such a situation, this question repeatedly comes to the mind of many taxpayers that which is better according to their income in the new tax system and the old tax system? Let us know the answer to this question in detail.

New Tax Regime Tax Calculation

If your annual income is Rs 3 lakh or less, then you will not have to pay any kind of tax under the new tax system. On the other hand, if you earn between Rs 3 lakh to Rs 7 lakh in a year, then you will have to pay a 5 percent tax on your earnings under the new tax regime. That is, you will have to pay Rs 20000 as tax. Apart from this, if your annual income is from Rs 7 lakh to Rs 9.25 lakh or less, then you will have to pay 10 percent of your earnings as tax. That is, you will have to pay Rs 22,500. After this, a 4% health and education cess will also be levied, which will amount to Rs 1,700. Thus, the total tax will be Rs 44,200.
 

Many exemptions in the old tax regime

Talking about the benefits of the old tax system, under this, taxpayers get the benefit of deduction under section 80C of Income Tax, while HRA and other deductions can also be availed. If you take advantage of these exemptions, then your tax liability can be reduced significantly. To understand: If your annual income is Rs 10 lakh and you take 80C and HRA exemption, then the tax can be up to Rs 70,100.