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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 20 Lakh Salary?
Let’s take an example to understand the taxation of INR 20 lakh salary under old and new tax regime, and see which one is more beneficial. Mr Rudrav earns a gross salary of INR 20,00,000. The following tables show Mr Rudrav’s tax liability under the old and new tax regime.
Old Tax Regime
| Gross Salary (A) | ₹20,00,000 |
| Less (Exemptions) | |
| HRA | ₹1,50,000 |
| LTA | ₹40,000 |
| Reimbursements (Food + Mobile/ Internet) | ₹24,000 |
| Children’s Education & Hostel Allowance | ₹9,600 |
| Standard Deduction | ₹50,000 |
| Professional Tax | ₹2,400 |
| Total Exemptions (B) | ₹2,76,000 |
| Less (Deductions) | |
| 80C | ₹1,50,000 |
| 80D | ₹50,000 |
| 80E | ₹25,000 |
| 80CCD (1B) | ₹50,000 |
| Section 24b | ₹2,00,000 |
| Total Deductions (C ) | ₹4,75,000 |
| Net Taxable Income (A-B-C) | ₹12,49,000 |
| Up to ₹2,50,000 (Nil) | ₹0 |
| ₹2,50,001 – ₹5,00,000 (5%) | ₹12,500 |
| ₹5,00,001 – ₹10,00,000 (20%) | ₹100,000 |
| Above ₹10,00,000 (30%) | ₹74,700 |
| Total Tax Payable | ₹1,87,200 |
New Tax Regime (FY 20-21, FY 21-22 & FY 22-23)
| Gross Salary (A) | ₹20,00,000 |
| Total Exemptions (B) | ₹0 |
| Total Deductions (C ) | ₹0 |
| Net Taxable Income (A-B-C) | ₹20,00,000 |
| Up to ₹2,50,000 (Nil) | 0 |
| ₹2,50,001 – ₹5,00,000 (5%) | ₹12,500 |
| ₹5,00,001 – ₹7,50,000 (10%) | ₹25,000 |
| ₹7,50,001 – ₹10,00,000 (15%) | ₹37,500 |
| ₹10,00,001 – ₹12,50,000 (20%) | ₹50,000 |
| ₹12,50,001 – ₹15,00,000 (25%) | ₹62,500 |
| Above ₹15,00,000 (30%) | ₹1,50,000 |
| Total Tax Payable | ₹3,37,500 |
New Tax Regime (From FY 23-24)
| Gross Salary (A) | ₹20,00,000 |
| Less (Exemptions) | |
| Standard Deduction | ₹50,000 |
| Total Exemptions (B) | ₹50,000 |
| Total Deductions (C) | ₹0 |
| Net Taxable Income (A-B-C) | ₹19,50,000 |
| Up to ₹3,00,000 (Nil) | ₹0 |
| ₹3,00,001 – ₹6,00,000 (5%) | ₹15,000 |
| ₹6,00,001 – ₹9,00,000 (10%) | ₹30,000 |
| ₹9,00,001 – ₹12,00,000 (15%) | ₹45,000 |
| ₹12,00,001 – ₹15,00,000 (20%) | ₹60,000 |
| Above ₹15,00,000 (30%) | ₹1,35,000 |
| Total Tax Payable | ₹2,85,000 |
From the above example, under the old regime, Mr Rudrav is liable to pay a tax of INR 1,87,200. Under the new regime, he will have to pay INR 3,37,500 till FY 22-23 and from FY 23-24, the net tax payable will be INR 2,85,000.
For Different Income Slabs
- Income Tax on 7 Lakh Salary
- Income Tax on 10 Lakh Salary
- Income Tax on 12 Lakh Salary
- Income Tax on 15 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 3,37,500. For FY 23-24 onwards, the net tax payable will be INR 2,85,000 (from the above example).
Claiming tax deductions and investing in tax-saving instruments will help reduce your tax liability to zero. For income up to 10 lakhs, you must be taking maximum advantage of available deductions and exemptions to have a net tax payable of zero.
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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