How much of your high-paying salary do you take home? A comparison of India’s new and old income tax regimes, focusing on earnings between ₹1 crore and ₹10 crore, highlights the significant differences in tax burden and net income. The data reveals a clear trend: the new regime typically offers a higher take-home pay. The comparison between the new and old regimes for different salary levels shows variations in tax liability and in-hand income.
₹1 crore salary: New vs old regime
“Under the new regime, for a salary of ₹1 crore, the total tax payable is ₹38,424,750, resulting in an in-hand salary of ₹61,575,250. In contrast, under the Old Regime, the tax payable is ₹42,455,478, leaving an in-hand salary of ₹57,544,522,” said Abhishek Soni, CEO and Co-founder of Tax2win.
₹5 crore salary: New vs old regime
“For a salary of ₹5 crore, the tax under the New Regime is ₹18,924,750, while it is slightly higher at ₹19,236,750 under the Old Regime. The in-hand salary remains ₹31,075,250 under the New Regime and ₹30,763,250 under the Old Regime,” said Abhishek Soni.
“At a salary of ₹1 crore, the average tax rate is 29.26% in the New Regime, compared to 32% in the Old Regime. As the salary increases, the average tax rate in both regimes also increases, reaching 38.42% in the New Regime and 42.46% in the Old Regime for ₹10 crore income,” the CEO of Tax2win added.
The percentage of in-hand income is higher in the new regime at all levels. “For instance, at ₹1 crore salary, the in-hand percentage is 70.74% under the New Regime, compared to 67.99% under the Old Regime. However, as income increases, the gap narrows, with in-hand percentages of 61.58% (New) vs 57.54% (Old) at ₹10 crore,” Soni added.
The new tax regime offers slightly lower tax rates and a higher in-hand salary across different income levels, making it a more attractive option for higher-income individuals.
Old Tax Regime
- Taxpayers can avail themselves of various exemptions, deductions, and rebates, such as: Deductions under Section 80C: Up to ₹1.5 lakh for investments in PPF, EPF, etc.
- Deductions for insurance premiums, home loans, etc.
- Standard Deduction of ₹50,000.
- Rebates like 80G for donations
- HRA exemptions.
Tax slabs under the Old Regime
Up to ₹2.5 lakh – No tax
₹2.5 lakh to ₹5 lakh – 5% tax
₹5 lakh to ₹10 lakh – 20% tax
Above ₹10 lakh – 30% tax
New Tax Regime
The New Regime was introduced with simplified tax rates but without the benefits of exemptions, deductions, and rebates like the Old Regime.
Tax slabs under the New Regime
₹0 – ₹4 lakh → No Tax
₹4 lakh – ₹8 lakh → 5%
₹8 lakh – ₹12 lakh → 10%
₹12 lakh – ₹16 lakh → 15%
₹16 lakh – ₹20 lakh → 20%
₹20 lakh – ₹24 lakh → 25%
₹24 lakh & above → 30%
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