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Income Tax News: Earning ₹15 Lakh? Know Your Tax Liability After Increase in Exemption Limit to Rs 12 Lakhs

Income Tax News: If your annual income is ₹15 lakh, your tax liability will differ under the old and new tax regimes. Compare deductions, slabs, and total tax payable to choose the best option and maximise savings.

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Income Tax News: Finance Minister Nirmala Sitharaman, on 1st February, announced the Budget 2025, which was widely hailed by the salaried class and the middle class. The highlight of the budget was that citizens with an annual income of up to ₹12 lakh will not have to pay any tax. However, if your annual income is ₹15 lakh, you might be wondering how much tax you will have to pay under the new and old tax regimes. While the government is set to introduce a new Income Tax Act to simplify the tax structure, it is crucial to understand the current tax implications. Depending on whether you opt for the old tax regime or the new one, your tax liability will vary. Here’s a detailed breakdown of how much tax you will have to pay under both regimes.

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Tax Calculation for ₹15 Lakh Annual Income

New Tax Regime: Lower Tax Liability

Under the new tax regime, the tax calculation is straightforward, as it offers a lower tax rate but fewer deductions.

Gross Income: ₹15 lakh

Standard Deduction: ₹75,000

Taxable Income: ₹15,00,000 - ₹75,000 = ₹14,25,000

Tax Slabs and Rates:

₹0 - ₹4 lakh: No tax

₹4 lakh - ₹8 lakh: 5% of ₹4 lakh = ₹20,000

₹8 lakh - ₹12 lakh: 10% of ₹4 lakh = ₹40,000

₹12 lakh - ₹14.25 lakh: 15% of ₹2.25 lakh = ₹33,750

Total Tax: ₹20,000 + ₹40,000 + ₹33,750 = ₹93,750

Cess (4%): ₹93,750 × 4% = ₹3,750

Final Tax Payable: ₹97,500

The new tax regime offers a simplified approach with reduced tax liability, making it an attractive option for many taxpayers.

Old Tax Regime: Higher Tax with More Deductions

In the old tax regime, individuals can claim various deductions under Section 80C, 80D, and 24B to reduce taxable income.

Gross Income: ₹15 lakh

Deductions:

Standard Deduction: ₹50,000

Section 80C (Investments like PPF, LIC): ₹1,50,000

Section 80D (Health Insurance Premiums): ₹1,00,000

Home Loan Interest (Section 24B): ₹2,00,000

Total Deductions: ₹5,00,000

Taxable Income after Deductions: ₹15,00,000 - ₹5,00,000 = ₹10,00,000

Tax Slabs and Rates:

₹0 - ₹2.5 lakh: No tax

₹2.5 lakh - ₹5 lakh: 5% of ₹2.5 lakh = ₹12,500

₹5 lakh - ₹10 lakh: 20% of ₹5 lakh = ₹1,00,000

Total Tax: ₹12,500 + ₹1,00,000 = ₹1,12,500

Cess (4%): ₹1,12,500 × 4% = ₹4,500

Final Tax Payable: ₹1,17,000

Which Regime Saves More Income Tax?

Comparing both tax regimes, an individual earning ₹15 lakh per annum will pay:

₹97,500 under the new tax regime

₹1,17,000 under the old tax regime

This results in a saving of ₹19,500 under the new tax regime. While the old tax regime offers deductions, the new tax regime provides a lower tax burden with a simplified structure. Taxpayers should choose based on their investment preferences and deduction eligibility.

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