UNION BUDGET 2023-24 AND
|
Income
|
IT RATES FOR
FY 2023-24 under old Regime |
IT RATES UNDER NEW REGIME
|
DIFFERENCE
|
UP TO RS 2.5.LAKHS
|
0 %
|
0%
|
NIL
|
2.5 TO 3.00 LAKHS
|
0%
|
0%
|
0%
|
3.00 TO 5.00 LAKHS
|
5%
|
5%
|
NIL
|
5.00 TO 6.00 LAKHS
|
20%
|
5%
|
15%
|
6.00TO 9.00 LAKHS
|
20%
|
10%
|
10%
|
9.00 TO 10.00 LAKHS
|
20%
|
15%
|
5%
|
10.00 lakhs to 12 lakhs
|
30%
|
15 %
|
15 %
|
12 lakhs to 15 lakhs
|
30%
|
20 %
|
10%
|
Above 15 lakhs
|
30 %
|
30 %
|
nil
|
NOTE : Under section 87a , Tax rebate can be availed up to Rs 5.00 lakhs taxable income in old regime and up to Rs 7.00 lakhs in the new tax regime .
We can see from the above chart that there is savings up to 10 % in each of the slabs , if we opt for new regime . New regime appears simple with lower taxes . But the new regime comes with a clause like " Terms & conditions apply " in commercial advertisement . If you opt for new regime , you have to forgo most of the rebates / deductions you were claiming in the earlier years .
New Updated Article
TAX PLANNING FOR FY 2022-23 ( AY 2023-24 )
Comprehensive Article on Income tax changes in Rules, Rates , Slabs , Rebates and Estimation
CLICK HERE TO READ
TAX PLANNING FOR FY 2022-23 ( AY 2023-24 )
Comprehensive Article on Income tax changes in Rules, Rates , Slabs , Rebates and Estimation
CLICK HERE TO READ
WHAT SENIOR CITIZENS LOSE / GAIN IN THE NEW IT REGIME ?
THE PRIVILEGES SENIOR CITIZENS GET :
Enhanced Rebate under section 87a up to the taxable income of Rs 7 .00 lakhs in the new regime while limit of Rs 5 lakhs remains in the old tax regime
Enhanced Rebate under section 87a up to the taxable income of Rs 7 .00 lakhs in the new regime while limit of Rs 5 lakhs remains in the old tax regime
THE PRIVILEGES SENIOR CITIZENS TO LOSE :
1. Deduction of Rs 50,000 under section 80 TTB on interest income from bank deposits will not be available for senior citizens .
2. Health insurance premium paid up to Rs 50,000 available to senior citizens under section 80 D will not be available in the new scheme .
3. Deductions / rebates under 80C will not be available .
There are more than 70 rebates and deductions which senior citizens may have to forgo along with other citizens . But you may not be using all of them now .
2. Health insurance premium paid up to Rs 50,000 available to senior citizens under section 80 D will not be available in the new scheme .
3. Deductions / rebates under 80C will not be available .
There are more than 70 rebates and deductions which senior citizens may have to forgo along with other citizens . But you may not be using all of them now .
THE PRIVILEGES SENIOR CITIZENS WILL RETAIN IN THE NEW REGIME :
The following tax exemptions available on Retirement benefits will continue to be available under the new tax regime also .
1. Standard Deduction of Rs 50,000 on salaries / pensions
2. Tax free gratuity up to Rs 20 lakhs
3. Leave encashment on retirement
a. Government employees - No limit
b. Others - Rs 25.00 lakhs
4. Benefits available on VRS - Maximum of Rs 5 .00 lakhs
5. Deductions available on Commuted Pension .
HOW MUCH A SENIOR CITIZEN CAN SAVE IN THE NEW REGIME ?
In order to find how much gain a senior citizen can have or how much he / she loses by opting for new regime , we have taken four examples of senior citizens who are eligible for different levels of rebates and deductions . We will work out for each category for their different levels of income . The four categories are .
1. CATEGORY A : Businessmen and Professionals who are not enjoying any rebate and deductions like standard deduction , interest income , etc . Their rebates are NIL now .
2. CATEGORY B :Retirees and pensioners who are enjoying standard deduction of Rs 50,000 , Deduction on bank deposit interest up to Rs 50,000 and Rebate of Rs 50,000 under 80D for health insurance premium . Total Rebates they are enjoying is Rs 1,50,000 .
3. CATEGORY C :Retirees and pensioners who are enjoying standard deduction of Rs 50,000 , Deduction on bank deposit interest up to Rs 50,000 and Rebate of Rs 50,000 under 80D for health insurance premium . Further they are enjoying additional benefits of Rs 1,50,000 under section 80C by contributing to LIC premium etc . Total Rebates they are enjoying is Rs 3,00,000 .
4. CATEGORY D :Retirees and pensioners who are enjoying standard deduction of Rs 50,000 , Deduction on bank deposit interest up to Rs 50,000 and Rebate of Rs 50,000 under 80D for health insurance premium . Further they are enjoying additional benefits of Rs 1,50,000 under section 80C by contributing to LIC premium etc and additional deductions for housing loan etc up to another Rs 1,50,000 . Total Rebates they are enjoying is Rs 4,50,000 .
1. CATEGORY A : Businessmen and Professionals who are not enjoying any rebate and deductions like standard deduction , interest income , etc . Their rebates are NIL now .
2. CATEGORY B :Retirees and pensioners who are enjoying standard deduction of Rs 50,000 , Deduction on bank deposit interest up to Rs 50,000 and Rebate of Rs 50,000 under 80D for health insurance premium . Total Rebates they are enjoying is Rs 1,50,000 .
3. CATEGORY C :Retirees and pensioners who are enjoying standard deduction of Rs 50,000 , Deduction on bank deposit interest up to Rs 50,000 and Rebate of Rs 50,000 under 80D for health insurance premium . Further they are enjoying additional benefits of Rs 1,50,000 under section 80C by contributing to LIC premium etc . Total Rebates they are enjoying is Rs 3,00,000 .
4. CATEGORY D :Retirees and pensioners who are enjoying standard deduction of Rs 50,000 , Deduction on bank deposit interest up to Rs 50,000 and Rebate of Rs 50,000 under 80D for health insurance premium . Further they are enjoying additional benefits of Rs 1,50,000 under section 80C by contributing to LIC premium etc and additional deductions for housing loan etc up to another Rs 1,50,000 . Total Rebates they are enjoying is Rs 4,50,000 .
Now let us examine the tax liability under both old and new regimes for each of the categories at different income levels
CATEGORY A ( WITH NIL EXEMPTIONS AND REBATES ) :
INCOME
|
TAX UNDER OLD SCHEME
|
TAX UNDER NEW REGIME
|
DIFFERENCE
|
5 LAKHS
|
NIL
|
NIL
|
NIL
|
6. LAKHS
|
30,000
|
NIL
|
30,000
|
7 LAKHS
|
50,000
|
NIL
|
50,000
|
8 LAKHS
|
70,000
|
40,000
|
30,000
|
9 LAKHS
|
90,000
|
45,000
|
45,000
|
10 LAKHS
|
1,10,000
|
60,000
|
50,000
|
11 LAKHS
|
1,40,000
|
75,000
|
65,000
|
12 LAKHS
|
1,70,000
|
90,000
|
80,000
|
13 LAKHS
|
2,00,000
|
1,10,000
|
90,000
|
14 LAKHS
|
2,30,000
|
1,30,000
|
1,00,500
|
15 LAKHS
|
2,60,000
|
1,50,000
|
110,000
|
HEALTH INSURANCE PLANS FOR SENIOR CITIZENS
WITH OR WITHOUT ENTRY AGE RESTRICTION
TO READ THE ARTICLE
CLICK HERE
WITH OR WITHOUT ENTRY AGE RESTRICTION
TO READ THE ARTICLE
CLICK HERE
CATEGORY B ( WITH EXEMPTIONS AND REBATES OF TOTAL RS 1,50,000 INCLUDING SANDARD DEDUCTION OF RS 50,000 ) :
INCOME
|
TAX UNDER
OLD SCHEME |
TAX UNDER
NEW REGIME |
DIFFERENCE
|
RS 5 LAKHS
|
NIL
|
NIL
|
NIL
|
6 LAKHS
|
NIL
|
NIL
|
NIL
|
7 LAKHS
|
20,000
|
NIL
|
20,000
|
8 LAKHS
|
40000
|
30,000
|
10,000
|
9 LAKHS
|
60000
|
40,000
|
20,000
|
10 LAKHS
|
80,000
|
52,500
|
27,500
|
11 LAKHS
|
1,00,000
|
67,500
|
32,500
|
12 LAKHS
|
1,25,000
|
82,500
|
42,500
|
13 LAKHS
|
1,55,000
|
1,00,000
|
55,000
|
14 LAKHS
|
1,85,000
|
1,20,000
|
65,000
|
15 LAKHS
|
2,15,000
|
1,40,000
|
75,000
|
CATEGORY C ( WITH EXEMPTIONS AND REBATES OF TOTAL RS 3,00,000 )
INCOME
|
TAX UNDER
OLD SCHEME |
TAX UNDER
NEW REGIME |
DIFFERENCE
|
5 LAKHS
|
NIL
|
NIL
|
NIL
|
6 LAKHS
|
NIL
|
NIL
|
NIL
|
7 LAKHS
|
NIL
|
NIL
|
NIL
|
8 LAKHS
|
NIL
|
30,000
|
-30,000
|
9 LAKHS
|
30,000
|
40,000
|
-10,000
|
10 LAKHS
|
50,000
|
52,500
|
-2,500
|
11 LAKHS
|
70,000
|
67,500
|
2,500
|
12 LAKHS
|
90,000
|
82,500
|
7,500
|
13 LAKHS
|
1,10,000
|
1,00,000
|
10,000
|
14 LAKHS
|
1,40,000
|
1,20,000
|
20,000
|
15 LAKHS
|
1,70,000
|
1,40,000
|
30,000
|
INVESTMENT OPTIONS FOR SENIOR CITIZENS
CLICK HERE TO READ
CLICK HERE TO READ
CATEGORY D ( WITH EXEMPTIONS AND REBATES OF TOTAL RS 4,50,000 )
INCOME
|
TAX UNDER
OLD SCHEME |
TAX UNDER
NEW REGIME |
DIFFERENCE
|
5 LAKHS
|
NIL
|
NIL
|
NIL
|
6 LAKHS
|
NIL
|
NIL
|
NIL
|
7 LAKHS
|
NIL
|
NIL
|
NIL
|
8 LAKHS
|
NIL
|
30,000
|
-30,000
|
9 LAKHS
|
NIL
|
40,000
|
-40,000
|
10 LAKHS
|
20,000
|
52,500
|
-32,500
|
11 LAKHS
|
40,000
|
67,500
|
-27,500
|
12 LAKHS
|
60,000
|
82,500
|
-22,500
|
13 LAKHS
|
80,000
|
1,00,000
|
-20,000
|
14 LAKHS
|
1,00,000
|
1,20,000
|
-20,000
|
15 LAKHS
|
1,25,000
|
1,40,000
|
-15,000
|
NOTES :
1. With revision of tax slabs , inclusion of standard deduction and availability of sec 87a benefit up to Rs 7.00 lakhs , new tax regime has become more attractive for the individual tax payers .
2. Senior citizens with no exemptions at all now will have tax benefit up to Rs 1,10,000 under the new regime compared to old one . Senior citizens with even higher tax exemption up to Rs 3.00 lakhs are better off in many tax slabs .
3. Pensioners / retirees who are having exemptions of Rs 4,50,000 will be better off with the old scheme
1. With revision of tax slabs , inclusion of standard deduction and availability of sec 87a benefit up to Rs 7.00 lakhs , new tax regime has become more attractive for the individual tax payers .
2. Senior citizens with no exemptions at all now will have tax benefit up to Rs 1,10,000 under the new regime compared to old one . Senior citizens with even higher tax exemption up to Rs 3.00 lakhs are better off in many tax slabs .
3. Pensioners / retirees who are having exemptions of Rs 4,50,000 will be better off with the old scheme
CONCLUSION : The new regime is made simple by removing most of the privileges senior citizens hitherto enjoying . Hence it was not attractive . But now with revised tax slabs , the new tax regime has become more attractive and senior citizens can utilize the new regime if reduces the tax liability
Silver lining of the new simple regime is it is optional . You can chose either of the two as per your convenience .
Silver lining of the new simple regime is it is optional . You can chose either of the two as per your convenience .