New Regime Tax Calculations: The monetary 12 months 2024-25 is nearly to finish. Taxpayers can file their earnings tax return (ITR) within the outdated and new tax regimes.
Nevertheless, the image will change from the monetary 12 months 2025-26, which can begin on April 1, 2025.
Taxpayers will be capable of file their ITR as per the proposed new tax regime, which was launched in Funds 2025 final month.
Important adjustments in new tax regime
Probably the most hanging change within the new tax regime is that earnings as much as Rs 12,00,000 is tax-free for non-salaried people.
So far as salaried-class people are involved, they do not must pay any tax until the earnings of Rs 12,75,000.
Proposed Tax Regime
Earnings Tax Slabs
Tax Fee
Upto Rs. 4,00,000
NIL
Rs. 4,00,001 – Rs. 8,00,000
5%
Rs. 8,00,001 – Rs. 12,00,000
10%
Rs. 12,00,001 – Rs. 16,00,000
15%
Rs. 16,00,001 – Rs. 20,00,000
20%
Rs. 20,00,001 – Rs. 24,00,000
25%
Above Rs. 24,00,000
30%
However what if their earnings is Rs 1,500,000? What would be the tax legal responsibility, and may they make it tax-free? How?
Tax legal responsibility on Rs 1,500,000 earnings
Earlier than figuring out that, let’s undergo tax slabs within the proposed new tax regime. Right here, you may see that earnings from Rs 12,00,000 to Rs 16,00,000 falls within the bracket of 15 per cent.
Tax legal responsibility on Rs 15,00,000 earnings
After a regular deduction of Rs 75,000 below Part 87A of the Earnings Tax Act, 1961, tax legal responsibility on the taxable earnings of Rs 14,25,000 shall be Rs 97,500, the place Rs 3,750 is the well being and training cess.
Now the query is easy methods to make it tax-free.
How you can make Rs 15,00,000 earnings tax-free
Within the proposed tax regime, there are specific relaxations that may make your earnings of Rs 15,00,000 tax-free.
Nationwide Pension System contribution from employer’s aspect
Conveyance invoice reimbursement
Uniform invoice reimbursement
Cell phone invoice reimbursement
Meals/leisure invoice reimbursement
Let’s undergo them one after the other.
NPS tax profit to new regime taxpayers
Taxpayers can get a tax profit on the employer’s contribution to their NPS account as much as 14 per cent of their fundamental wage below Part 80CCD(2).
Let’s assume that the essential wage of an individual incomes Rs 15,00,000 is Rs 7,50,000. The 14 per cent employer contribution on it is going to be Rs 1,05,000.
Conveyance allowance
For conveyance that workers use for official function, they’ll declare reimbursement for the payments they pay.
One can get this reimbursement included of their wage construction to get tax advantages.
Let’s assume that at Rs 5,000 a month, you get the advantage of Rs 60,000 a 12 months.
Uniform allowance
You might get it included in your wage construction.
At Rs 15,00,000, it’s possible you’ll simply get Rs 2,000 a month as a uniform allowance, which in a 12 months shall be Rs 24,000>
Cell phone payments
In case you use your cell phone or web connection for workplace use, you will get reimbursement for it additionally.
It may be Rs 1,500 or extra. At Rs 1,500 a month, you will get Rs 18,000 reimbursement a 12 months for the cellular invoice.
Meals/leisure invoice
It’s also possible to get meals/leisure reimbursement as a part of your wage construction.
At a Rs 15,00,000 wage bundle, the reimbursement might be Rs 3,000 a month or Rs 36,000 a 12 months.
Tax legal responsibility after deduction
After a regular deduction, the taxable earnings was Rs 14,25,000.
If we embody the sum of NPS employer contribution and reimbursements, it is going to be Rs 2,43,000.
After these deductions, the taxable earnings shall be Rs 11,82,000, the place after a rebate of Rs 38,200 below Part 87A, the complete earnings shall be tax-free.
