Â
UNION BUDGET 2023-24 AND
|
IncomeÂ
|
IT RATES FORÂ
​FY 2023-24 ​under old Regime |
IT RATES UNDER NEW REGIMEÂ
|
DIFFERENCEÂ
|
UP TO RS 2.5.LAKHSÂ
|
0 %
|
0%
|
NIL
|
2.5 TO 3.00 LAKHS
|
0%
|
0%
|
0%
|
3.00 TO 5.00 LAKHS
|
5%
|
5%
|
NILÂ
|
5.00 TO 6.00Â LAKHSÂ
|
20%
|
5%
|
15%
|
6.00TO 9.00Â LAKHS
|
20%
|
10%
|
10%
|
9.00 TO 10.00 LAKHS
|
20%
|
15%
|
5%
|
10.00 lakhs to 12 lakhsÂ
|
30%
|
15 %Â
|
15 %Â
|
12 lakhs to 15 lakhsÂ
|
30%
|
20 %Â
|
10%
|
Above 15 lakhsÂ
|
30 %Â
|
30 %Â
|
nilÂ
|
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 .Â
 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  . Â
New Updated ArticleÂ
      Â
 TAX PLANNING FOR FY 2022-23 ( AY 2023-24 )Â
Comprehensive  Article on Income tax changes in Rules, Rates , Slabs , Rebates  and EstimationÂ
CLICK HERE TO READ ​
      Â
 TAX PLANNING FOR FY 2022-23 ( AY 2023-24 )Â
Comprehensive  Article on Income tax changes in Rules, Rates , Slabs , Rebates  and EstimationÂ
CLICK HERE TO READ ​
WHAT SENIOR CITIZENS LOSE / GAIN IN THE NEW IT REGIME ?Â
THE PRIVILEGESÂ Â SENIOR CITIZENSÂ GETÂ :Â Â
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 regimeÂ
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 regimeÂ
THE PRIVILEGESÂ Â SENIOR CITIZENS TO LOSE :Â Â
​
​
 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 .Â
​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 .Â
​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 .Â
​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 .Â
THE PRIVILEGESÂ Â SENIOR CITIZENSÂ Â WILL RETAIN IN THE NEW REGIMEÂ :Â Â
Â
 The following tax exemptions available on Retirement benefits will continue to be available under the new tax regime also .Â
1. Standard Deduction of Rs 50,000 on salaries / pensions
2. Tax free gratuity up to Rs 20 lakhsÂ
3. Leave encashment on retirementÂ
a. Government employees - No limitÂ
b. Others - Rs 25.00 lakhs Â
4. Benefits available on VRSÂ - Maximum of Rs 5 .00 lakhsÂ
​5. Deductions available on Commuted Pension .Â
 The following tax exemptions available on Retirement benefits will continue to be available under the new tax regime also .Â
1. Standard Deduction of Rs 50,000 on salaries / pensions
2. Tax free gratuity up to Rs 20 lakhsÂ
3. Leave encashment on retirementÂ
a. Government employees - No limitÂ
b. Others - Rs 25.00 lakhs Â
4. Benefits available on VRSÂ - Maximum of Rs 5 .00 lakhsÂ
​5. Deductions available on Commuted Pension .Â
 HOW MUCH A SENIOR CITIZEN CAN SAVE IN THE NEW REGIME ?Â
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 .Â
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 .Â
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 .Â
 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 .Â
 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 . Â
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 .Â
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 .Â
 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 .Â
 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 . Â
Now let us examine  the tax liability under  both old and new regimes for each of the categories at different income levelsÂ
 CATEGORY A  ( WITH NIL EXEMPTIONS AND REBATES ) :Â
INCOMEÂ
|
TAX UNDER OLD SCHEMEÂ
|
TAX UNDER NEW REGIMEÂ
|
DIFFERENCEÂ
|
5 LAKHSÂ
|
NILÂ
|
NILÂ
|
NILÂ
|
6. LAKHSÂ
|
30,000
|
NILÂ
|
30,000
|
7 LAKHSÂ
|
50,000
|
NIL
|
50,000
|
8 LAKHSÂ
|
70,000
|
40,000
|
30,000
|
9 LAKHSÂ
|
90,000
|
45,000
|
45,000
|
10 LAKHS
|
1,10,000
|
60,000
|
50,000
|
11 LAKHSÂ
|
1,40,000​
|
75,000
|
65,000
|
12 LAKHSÂ
|
1,70,000
|
90,000
|
80,000
|
13 LAKHS
|
2,00,000
|
1,10,000
|
90,000
|
14 LAKHSÂ
|
2,30,000
|
1,30,000
|
1,00,500
|
15 LAKHSÂ
|
2,60,000
|
1,50,000
|
110,000
|
HEALTH INSURANCE PLANS FOR SENIOR CITIZENS
WITH OR WITHOUT ENTRY AGE RESTRICTIONÂ Â
TOÂ READ THE ARTICLE
CLICK HEREÂ
WITH OR WITHOUT ENTRY AGE RESTRICTIONÂ Â
TOÂ READ THE ARTICLE
CLICK HEREÂ
 CATEGORY B ( WITH EXEMPTIONS AND REBATES OF TOTAL RS 1,50,000 INCLUDING SANDARD DEDUCTION OF RS 50,000 ) :Â
INCOMEÂ
|
TAX UNDERÂ
OLD SCHEMEÂ |
TAX UNDERÂ
​NEW REGIME |
DIFFERENCEÂ
|
RS 5 LAKHSÂ
|
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 CÂ ( WITHÂ EXEMPTIONS AND REBATES OF TOTAL RS 3,00,000 )
INCOMEÂ
|
TAX UNDERÂ
​OLD SCHEME |
TAX UNDER
​NEW REGIME |
DIFFERENCEÂ
|
5 LAKHS
|
NILÂ
|
NILÂ
|
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 CITIZENSÂ
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 |
DIFFERENCEÂ
|
5 LAKHSÂ
|
NIL
|
NILÂ
|
NIL
|
6 LAKHS ​
|
NIL
|
NIL
|
NIL
|
7 LAKHS ​
|
NIL
|
NILÂ
|
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 :Â
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 .Â
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 .Â
3. Pensioners / retirees who are having exemptions of Rs 4,50,000Â Â will be better off with the old schemeÂ
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 .Â
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 .Â
3. Pensioners / retirees who are having exemptions of Rs 4,50,000Â Â will be better off with the old schemeÂ
 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 liabilityÂ
Silver lining of the new simple regime is it is optional . You can chose either of the two  as per your convenience .Â
Silver lining of the new simple regime is it is optional . You can chose either of the two  as per your convenience .Â