Taxpayers should be aware that a maximum tax of 30 percent will be levied for income above ₹10 lakh in the old regime and above ₹15 lakh in the new regime.
As the last date to file your income tax return (ITR) draws closer, you should be aware that if your income falls between ₹10 lakh to ₹15 lakh, you do not have to pay tax at the maximum rate of 30 percent if you opt for the new tax regime.
This way, you can save on income tax outgo but you should ensure, at the same time, that you have not made a significant investment in any tax-saving instrument.
As we are aware that the taxpayers are incentivised to pay income tax at lower rates under the new tax regime for foregoing tax exemptions under various sections such as 80C or 80D.
So, someone with income more than ₹10 lakh but lower than ₹15 lakh will have to pay tax at 20 or 25 percent rate in the new regime. On the other hand, if you opt for the old tax regime, you will have to pay tax at the rate of 30 percent.
To compare tax in both the regimes, one can use this calculator given on the tax department’s portal.
Meanwhile, you should keep in mind that 30 percent is the highest tax in the slab in both regimes: old and new. The last date for filing income tax returns for the income earned in the financial year 2022-23 is July 31, 2023.
Basically, there are two systems in India for filing income tax returns. One is the new tax regime and the other is the old tax regime.
If individuals opt for the new tax regime, they will have to submit form 101E before filing taxes for the current financial year. The declaration made in Form 101E helps the government to assess the taxpayers’ choice of the tax regime, enabling them to avail the benefits of the new tax regime.
People see different tax slabs and different benefits in both these tax systems. Along with this, a maximum tax of 30 percent is also paid in both these tax slabs. Also, if someone files his income tax return after the last date, one will be made to pay interest and penalty.
Source: https://mintgenie.livemint.com/news/personal-finance/income-tax-you-can-avoid-paying-30-percent-tax-in-the-new-tax-regime-details-here-151686212694979
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