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Income Tax Slabs Under the Old Income Tax Regime and New Income Tax Regime
Old Tax Regime
| Income Tax Slab | Tax Rate |
| Up to ₹ 2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
New Tax Regime (FY 20-21, FY 21-22 & FY 22-23)
| Income Tax Slab | Tax Rate |
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹7,50,000 | 10% |
| ₹7,50,001 – ₹10,00,000 | 15% |
| ₹10,00,001 – ₹12,50,000 | 20% |
| ₹12,50,001 – ₹15,00,000 | 25% |
| Above ₹15,00,000 | 30% |
New Tax Regime ( From FY 23-24)
| Income Tax Slab | Tax Rate |
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹6,00,000 | 5% |
| ₹6,00,001 – ₹9,00,000 | 10% |
| ₹9,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Check Current Income Slabs and Tax Rates in 2024
How to Pay Zero Tax on a 7 Lakh Salary?
Let’s take an example to understand the taxation of INR 7 lakh salary under old and new tax regime, and see which one is more beneficial. Mr Aditya earns a gross salary of INR 7,00,000. The following tables show Mr Aditya’s tax liability under the old and new tax regime.
Old Tax Regime
| Gross Salary (A) | ₹700,000 |
| Less (Exemptions) | |
| HRA | ₹50,000 |
| Standard Deduction | ₹50,000 |
| Professional Tax | ₹2,400 |
| Total Exemptions (B) | ₹102,400 |
| Less (Deductions) | |
| 80C | ₹100,000 |
| 80D | ₹10,000 |
| Total Deductions (C ) | ₹110,000 |
| Net Taxable Income (A-B-C) | ₹487,600 |
| Up to ₹2,50,000 (Nil) | ₹0 |
| ₹2,50,001 – ₹5,00,000 (5%) | ₹11,880 |
| ₹5,00,001 – ₹10,00,000 (20%) | ₹0 |
| Above ₹10,00,000 (30%) | ₹0 |
| Total Tax | ₹11,880 |
| Less: Tax Rebate | -₹11,880 |
| Net Tax Payable | ₹0 |
New Tax Regime (FY 20-21, FY 21-22 & FY 22-23)
| Gross Salary (A) | ₹700,000 |
| Total Exemptions (B) | ₹0 |
| Total Deductions (C ) | ₹0 |
| Net Taxable Income (A-B-C) | ₹700,000 |
| Up to ₹2,50,000 (Nil) | ₹0 |
| ₹2,50,001 – ₹5,00,000 (5%) | ₹12,500 |
| ₹5,00,001 – ₹7,50,000 (10%) | ₹20,000 |
| ₹7,50,001 – ₹10,00,000 (15%) | ₹0 |
| ₹10,00,001 – ₹12,50,000 (20%) | ₹0 |
| ₹12,50,001 – ₹15,00,000 (25%) | ₹0 |
| Above ₹15,00,000 (30%) | ₹0 |
| Total Tax Payable | ₹32,500 |
New Tax Regime (From FY 23-24)
| Gross Salary (A) | ₹700,000 |
| Less (Exemptions) | |
| Standard Deduction | ₹50,000 |
| Total Exemptions (B) | ₹50,000 |
| Total Deductions (C) | ₹0 |
| Net Taxable Income (A-B-C) | ₹650,000 |
| Up to ₹3,00,000 (Nil) | ₹0 |
| ₹3,00,001 – ₹6,00,000 (5%) | ₹15,000 |
| ₹6,00,001 – ₹9,00,000 (10%) | ₹5,000 |
| ₹9,00,001 – ₹12,00,000 (15%) | ₹0 |
| ₹12,00,001 – ₹15,00,000 (20%) | ₹0 |
| Above ₹15,00,000 (30%) | ₹0 |
| Total Tax | ₹20,000 |
| Less: Tax Rebate | -₹20,000 |
| Net Tax Payable | ₹0 |
To pay zero tax on a salary of 7 lakhs, you must take advantage of salary exemptions and deductions. From the above example, because Mr Aditya had good enough tax exemptions and deduction expenses, the net tax payable was Zero. Under the new regime, Mr Arun will have to pay INR 32,500 till FY 22-23 and from FY 23-24, the net tax payable is zero. As per the new budget 2023, the income tax rebate has be increased to INR 7,00,000.
For Different Income Slabs
- Income Tax on 10 Lakh Salary
- Income Tax on 12 Lakh Salary
- Income Tax on 15 Lakh Salary
- Income Tax on 20 Lakh Salary
Frequently Asked Questions
You can pay zero tax on a salary of 15 lakhs, provided you have invested in tax savings options and claim applicable deductions and exemptions. Under the old regime, your net tax payable can be zero if you claim exemptions and invest in tax-saving schemes. In case you are following the new tax regime for FY 20-21, FY 21-22 & FY 22-23 the net tax payable amount will be INR 32,500. For FY 23-24 onwards, the net tax payable on 7 lakhs is zero, as the tax rebate limit has been increased to INR 7,00,000.
To pay zero tax on a 10 lakhs salary, you must invest in tax-saving instruments and claim deductions for expenses incurred.
Yes, with good tax planning, it is possible to save 100% on tax. To save on tax, you need to invest in tax-saving options and also claim for all applicable exemptions. However, if you are in the higher tax bracket, it is inevitable to pay taxes.
As per the old regime, income up to INR 2,50,000 is tax free. From Budget 2023, the limit has been increased to INR 3,00,000.
RELATED READS
- How to Save Maximum from Income Tax
- New Vs Old Tax Regime – Which is Best?
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