Tax on 11 Lakh Income

Old Vs. New Tax Slabs as per Union Budget 2024

The Union Budget 2024 introduced some key changes to the new tax structure in India, particularly in the tax slabs. A quick comparison between the old and new tax regimes is as follows:

Changes in Income Tax Structure for FY 2024-25 (AY 2025-26)

• Standard Deduction: Increased from ₹50,000 to ₹75,000 for those opting for the new regime.

• Family Pensioners: Deductions for family pensioners have increased from ₹15,000 to ₹25,000 under the new tax regime.

• Capital Gains Tax: Unlisted bonds and debentures will now attract tax on capital gains at applicable slab rates, regardless of the holding period.

• Short Term Capital Gains (STCG): The tax on STCG for listed equity shares, units of equity-oriented funds, and units of business trusts has been increased from 15% to 20%.

• Long Term Capital Gains (LTCG): The exemption limit for Long-Term Capital Gains on the transfer of equity shares, equity-oriented units, or units of business trusts has been increased from ₹1 lakh to ₹1.25 lakh per year, with the tax rate increased from 10% to 12.5%.

• LTCG Tax on Other Capital Assets: Long-term capital gains tax on other financial and non-financial assets has been reduced from 20% to 12.5%, but the indexation benefit has been removed.

• Tax Benefits on Pension Scheme: The deduction limit under Section 80CCD for the employer's contribution to Pension schemes like Employee’s Provident Fund and National Pension Scheme has been increased from 10% to 14% of the salary.

• Securities Transaction Tax (STT): The Securities Transaction Tax (STT) on futures has been increased from 0.0125% to 0.02% and on options from 0.0625% to 0.1%.

Calculation for Tax on 11 Lakh Salary

Income Tax Calculation for the Above Taxable Income under Old and New Tax Regime:

Key Points to Note:

When deciding between the old and new tax regimes, it is important to think about several factors that can impact your payable tax and overall financial situation:

• Under the old tax regime, the total tax liability is significantly lower due to the various deductions available. 

• Under the new tax regime, although the slab rates are lower, the lack of most deductions results in a higher tax liability.

• If your salary includes components like House Rent Allowance (HRA), Leave Travel Allowance (LTA), and other allowances that are exempt from tax, the old regime might be more beneficial.

• If your total deductions are high, the old regime might save you more money, even if the tax rates are higher.

• If you don't have many exemptions or deductions, the new regime, with its lower tax rates, could be more advantageous.

• If you prefer a simpler tax calculation without the need to invest in specific tax-saving instruments, the new regime might be better for you.

• If you have business income, switching back to the old regime is only allowed once if you opt for the new regime, so think carefully.

Use an online income tax calculator to insert your income and potential deductions under both regimes. This will give you a clear idea of your tax liability in each scenario.

Income Tax Exemptions under Old and New Tax Regime for FY 2024-25 (AY 2025-26) 

The following table shows a concise comparison of tax benefits for an 11 lakh salary in India under the old and new tax regimes:

In Conclusion

If you earn 11 lakh rupees a year, the amount of tax you owe depends on the selected new and old regime tax slabs and related deductions for that year. By using exemptions and deductions like those under Section 80C and 80D as per the old tax regime, you can lower your taxable income and reduce how much tax you have to pay. It is a good idea to plan your taxes ahead of time to save money and follow the tax rules.