Excel Calculator to compare Tax under Existing & New Personal Tax Regime u/s 115BAC

Excel Calculator to compare Tax under existing and new Personal Tax Regime u/s 115BAC

Union Budget 2020-21 has disappointed individual taxpayers who were expecting tax benefits in the form of substantial increase in basic threshold of income tax exemption and increase in deductions particularly in Section 80C of the Income Tax Act, 1961. 

However, the Government instead of meeting out any of the expectations, kept the existing tax exemption limit and available deductions/rebates unchanged but for the proposed New Simplified Personal Income Tax Regime.

The Finance Bill 2020 (26 of 2020) has inserted new sections namely section 115BAC to introduce the new Scheme of Taxation on income of Individuals and HUFs.

The New Tax Regime u/s 115BAC is optional and if chosen by the assessee, his/her income shall be taxable starting from Assessment Year 2021-22 at the tax rates provided in the New Regime

Unlike the existing tax regime consisting of three taxable slabs with minimum tax rate of 5% and highest being 30%, the New Tax Regime consists of six taxable brackets with minimum tax rate of 5% with 5% incremental rise for each higher tax brackets.

A comparative chart of the tax brackets and rates under both Regime is as under:

Tax Brackets Tax rate (Existing Regime) Tax Rate (New Regime)
Upto Rs 2,50,000 Nil Nil
From Rs 2,50,001 to Rs 5,00,000 5% 5%
From Rs 5,00,001 to Rs 7,50,000 20% 10%
From Rs 7,50,001 to Rs 10,00,000 20% 15%
From Rs 10,00,001 to Rs 12,50,000 30% 20%
From Rs 12,50,001 to Rs 15,00,000 30% 25%
Above Rs 15,00,000 30% 30%

Going by the above table alone, its seems a perfect gift to the taxpayers where tax rates have been slashed and more tax brackets have been provided to reduce the tax burden. But this lucrative New Tax Regime comes with a condition that many taxpayers would not appreciate.

Under the New Tax Regime, the assessee shall not be entitled to most of the exemptions and deductions that a common taxpayers has relied upon extensively not only to make investments but also to plan and reduce his tax. The notable deductions/exemptions that would be unavailable in the new Tax Regime include standard deduction on salaries, housing loan interest, section 80C deductions (for insurance premium, P.F., tuition fees, etc.) etc.

The relief however is that the new Regime is only optional and is totally at the wisdom of the assessee whether to choose it or not.

Taxpayers are in a fix what to do. Whether to continue existing payments towards insurance premium, provident fund etc. or whether defer their housing loan etc. The helpless individual taxpayers which do not have access to a tax expert are finding hard to determine which tax regime is beneficial to them.

The ABCAUS Excel calculator compares tax incidence under the existing tax regime and the proposed New Simplified Personal Tax Regime and attempts to provide a handy tool to the taxpayers to choose their course of action in future.

Download Excel New Tax Regime tax Comparison Calculator  Click Here >>

(last revised on 03/02/2020 9:06 PM)

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4 Comments

  1. V.G.Torka February 5, 2020
    • administrator February 5, 2020
  2. Bablu Jaiswar February 3, 2020
    • administrator February 3, 2020

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