Income tax slab rate old & new tax regime f.y. 2022-23

Income tax slab rate -old & new tax regime F.Y. 2022-23 , will tells you which regime is best for the filing income tax return. Further, the income tax slab rate in new tax regime f.y. 2022-23 provides lower tax liability. However, You are free to choose income tax slab rate old & new tax regime F.Y. 2022-23.

We are giving a comparative study below to show how the new tax slab rates can reduce your tax liability, provided you are prepared to give up the deductions allowed in the old tax regime:

Comparison of old and new tax regime f.y. 2022-23

The new income tax slabs have been normalized for taxpayers of all age groups with lower income tax rates in the income bracket up to Rs. 15,00,000. But, it disallows 70 tax exemptions and deductions that are available as relief with the old regime tax rates.

However, old tax regime provides exemptions and deduction under chapter VIA like 80C , 80D and others. Whereas new tax regime lower the tax liability with no exemption and deductions under chapter VIA.The new tax regime is introduced to make tax compliance easier .

Assesses may have option to choose tax regime

Any individual ,HUF,AOP (other than co-operative), BOI and AJP not willing to tax under new tax regime can opt to be taxed under old tax regime. It means individual can make comparison of old and new tax regime and than he/she can opt the tax regime for calculating tax.

For person having income under the head “profit and gains of business or profession” and having opted for old regime can revoke that option only once and after that they will continue to be taxed under the new regime. For those not having income under head “profit and gains of business or profession” option for old tax regime may be exercised each year.

Let us make comparison of slab rate in old & new tax regime -f.y. 2022-23 :

A) Income tax slab under new tax regime

Any person earning income in financial year 2022-23 (i.e. from 1st April, 2022 to 31st March, 2023) and planning to opt new tax regime will have to calculate income tax on the basis of below mentioned income tax slabs:

Slab	Tax Rate
0 to 2,50,000	Nil
2,50,001 to 5,00,000	5%
5,00,001 to 7,50,000	10%
7,50,001 to 10,00,000	15%
10,00,001 to 12,50,000	20%
12,50,001 to 15,00,000	25%
Above 15,00,000	30%

Above tax rates are applicable for F.Y. 2020-21, 2021-22,2022-23.

As compared to old tax regime , the new tax regime provide lower tax liability but many deductions are not allowed which were allowed under old regime.

Following deductions withdrawn under new tax regime fy 2022-23

Most of the deductions and exemptions have been withdrawn in new tax regime which are as follows:

1. Leave Travel allowance
2. House Rent allowance
3. Interest on home loan
4. Deductions under chapter VIA such as 80C, 80CCC, employee contribution to 80CCD ,80D,80DDB,80E, 80EEA and 80TTA except 80CCD(2).
5. Employee contribution to PPF

Deductions allowed under new tax regime F.Y. 2022-23 (A.Y. 2023-24)

Most of the exemptions and deductions are not allowed under new tax regime , below mentioned deductions are allowed as under:

1. Standard deductions of Rs. 50,000 to salaried Individual
2. Deductions of Rs.15,000 from family pension
3. conveyance allowed for performance of office duties
4. Employers contribution to notified pension a/c under section 80CCAD(2) of IT Act

Rebate u/s 87A-https://taxandfinanceguide.com/?p=183&preview=true

Comparison of old and new tax regime f.y. 2022-23 : under new tax regime Rebate u/s 87A has been increases from 5,00,000 (tax rebate 12,500) to 7,00,000(tax rebate 25,000). This means any individual opting new tax regime with taxable income up to 7,00,000 will not pay any tax. Earlier above rebate was up to 5,00,000.

Income tax slab rate in old tax regime F.Y. 2022-23 (A.Y. 2023-24)

An individual may opt old tax slab for calculating tax liability .As we learned under new tax regime, income tax slab and rate is same for all categories of individual whereas under old regime slab is differ according to the age of individual.

Tax Slab for individual age below 60 years

Slab	Tax Rate
0-2,50,000	Nil
2,50,001 to 5,00,000	5%
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

Tax slab for individual; age above 60 years but below 80 years i.e. senior citizen

Slab	Tax Rate
0-3,00,000	Nil
3,00,001 to 5,00,000	5%
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

Tax slab for individual age above 80 years i.e. super senior citizen

Slab	Tax Rate
0-5,00,000	Nil
5,00,001 to 10,00,000	20%
Above 10,00,000	30%

Let us learn old & new tax regime with an example

comparison of slab rate in old & new tax regime f.y. 2022-23

Mr. x having salary income of Rs. 19,00,000 and paid 30,000 Mediclaim, 35,000 LIC premium, contributed to PPF Rs.50,000 and Mediclaim of his family Rs.20,000 and paid donation of Rs. 15,000( deductible under 80G). Interest on FD Rs. 32,000 and saving bank interest Rs.12,000.

A) Computation of taxable Income in old and new tax regime:

Particulars		Taxable income under old tax regime	Taxable income under new tax regime
	Amount(Rs.)	Amount(Rs)	Amount(Rs.)
Salary Income Less: Standard deduction	19,00,00 (50,000)	18,50,000	18,50,000
Add: Interest on FD Savings bank interest	32,000 12,000	44,000	44,00,00
Gross Total Income		18,94,000	18,94,000
Less: Deductions under chp VIA
* U/S 80C LIC premium PPF Contribution * U/S 80D Self Family * U/S 80 G Donation to charitable trust * U/S 80TTA interest on savings bank interest	30,000 50,000 35,000 20,000 15,000 10,000	(1,60,000)	No deductions available
Taxable Income		17,34,000	18,94,000

B) Computation of tax liability under new tax regime

Income	Tax rate	Tax Amount
0 to 2,50,000	Nil
2,50,001 to 5,00,000	5% of 2,50,000 = 12,500	12,500
5,00,001 to 7,50,000	10% of 2,50,000 = 25,500	25,000
7,50,001 to 10,00,000	15% of 2,50,000 = 37,500	37,500
10,00,000 to 12,50,000	20% of 2,50,000 = 50,000	50,000
12,50,001 to 15,00,000	25% of 2,50,000 = 62,500	62500
above 15,00,000 (18,94,000-15,00,000)	30% of 3,94,000 = 1,18,200	1,18,200
Total Tax Liability		3,05,700
Health and education cess 4%	4% of 3,05,000	12,228
Net tax liability under new tax regime		3,17,928

C) Computation of tax liability under old tax regime :

Income	Tax Rate	Tax Amount
0 to 2,50,000	Nil
2,50,001 to 5,00,000	5% of 2,50,000 = 12,500	12,500
5,00,001 to 10,00,000	20% of 5,00,000 = 1,00,000	1,00,000
above 10,00,000 (17,34,000- 10,00,000)	30% of 7,34,000 = 2,20,200	2,20,200
Total Tax Liability		3,32,700
Health and education cess	4% of 3,32,700	13,308
Net tax liability under old tax regime		3,46,008

As we can clearly observe from above example that the tax liability under new tax regime as compared to old is lower.