TAX SLAB UNDER NEW REGIME

 

TAX SLAB UNDER NEW REGIME


Up to 2.5Lacs tax amount will be Nil
Above Rs.2.50 up to Rs.5 Lacs there will be tax @ 5% of Total income more than 2.5 Lacs
Above Rs.5 Lacs up to Rs.7.5 Lacs there will be tax @10% of the total income more than 5 Lacs
Above Rs.7.5 Lacs up to 10 lacs there will be tax @ 15% of the total income more than Rs.7.5 Lacs

Above Rs.10 Lacs up to 12.5 lacs there will be tax @ 20% of the total income more than Rs.10 Lacs

Above Rs.12.5 Lacs up to 15 lacs there will be tax @ 25% of the total income more than Rs.12.5 Lacs

Above Rs.15 Lacs there will be tax @ 30% of the total income more than Rs.15 Lacs

 

There will be 4% addition on tax for education cess

 

Example

An Employee earn Rs.1800000/- as net salary after all Exemptions and deductions

Calculation of tax is as follow

First 250000 Tax will be Nil

Above 250000 up to 500000 = Tax Amount (250000* 5%=12500)

Above 500000 up to 750000 = Tax Amount (250000*10%=25000)

Above 750000 up to 1000000 = Tax amount (250000*15%=37500)

Above 1000000 up to 1250000 = Tax amount (250000*20%=50000)

Above 1250000 up to 1500000 = Tax amount (250000*25%=62500)

Above Rs.1500000 = Tax amount (300000*30%=90000)

 

TAX ON INCOME OF Rs. 1800000/- = 12500+25000+37500+50000+62500+90000 = Rs. 277500/-

Add 4% education cess = 277500*4%= 11100

Final Tax Liability is of Rs. 277500+11100= 288600/-

Note: under new regime most of the exemptions and deduction are not allowed like standard deduction of Rs. 50000/- for salaried person and chapter VI-A deduction like 80C, 80D, 80E, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc. are disallowed.


CA KHALID REHMAN

(Chartered Accountant)

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