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The assessee can choose between the new tax regime and the old tax regime, depending on what is most appropriate from the point of view of tax planning. Income Tax Rates Under New Tax Regime Vs Old Tax Regime Income Slab (Rs) Tax Rate (Old Regime) Tax Rate (New Regime – Without Exemptions & Deductions) Upto 2.5 Lakh Nil Nil 2.5-5 Lakh 5 5% 5% 5-7.5 Lakh 20% 10% 7.5-10 Lakh 20% 15% 10-12.5 Lakh 30% 20% 12.5-15 Lakh 30% 25% Above 15 Lakh 30% 30% Note: The above rates are subject to surcharge and Cess, as applicable. Which scheme is better (new vs old) The new tax regime has proposed lower income tax rates for the income group up to Rs 15 lakh. But the proposed lower tax rates will apply only if we are willing to forgo available exemptions and deductions. This means that when we opt for the new tax regime, we have to forego certain exemptions such as Leave Travel Allowance (LTA), House Rent Allowance (HRA), etc.]and deductions available under Chapter 1.
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