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Difference between Old & New Income Tax Slabs 2020

New Income Tax Slabs 2020 announced in Union Budget 2020-21. The new income tax rates are different from the old tax rates. Have a look at the difference between old and new Income Tax Regime here. New Income Tax Rates removes over 70 exemptions. Check these exemptions here.

Feb 3, 2020 18:33 IST
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New Income Tax Slabs 2020 announced: The Union Budget 2020-21, presented by Finance Minister Nirmala Sitharaman, introduces the new Income Tax Regime for the year 2020-21. The new income tax slabs are quite different from the old tax rates. If a taxpayer wants to avail of the benefits of New Income Tax Regime, he or she has to forgo over 70 exemptions that are offered in old income tax slabs. Taxpayer has to decide between the old and new tax slabs. Get to know the difference between old and new tax rates or slabs here before making the final choice. Also, know the exemptions or deductions which you will not be able to enjoy if you go for the new income tax regime. 

The income tax regime has been made easier on the basis of different income slabs from Rs 5 lakh to Rs 15 lakh and above. If you are opting for new tax rates 2020 you will not be allowed to enjoy several exemptions including deductions under Section 80C/80D, housing rent allowance(HRA), LTC, Entertainment Allowance, self-occupied or vacant property interest and professional tax. 7 slabs have been introduced for personal income tax. The tax rates on income up to Rs 15 lakh have been reduced to benefit the Indian taxpayers.

Here is the key difference between the old and new income tax rates along with the exemptions removed in new regime:

Tax Payable under Old & New Tax Slabs & Net Savings (Without Exemptions)

Income (Rupees)

Old Tax Payable

(2019-20)

New Tax Payable

(2020-21)

Gains or Savings

Up to Rs 5 Lakh

0

0

0

5 Lakh to 7.5 lakh

117000

39000

Rs 78,000

7.5 lakh to 10 lakh

117000

78000

Rs 39,000

10 lakh to 12.5 lakh

1,95,000

1,30,000

Rs 65,000

12.5 lakh to 15 lakh

2,73,000

1,95,000

Rs 78,000

20 lakh

4,29,000

3,51,000

Rs 78,000

Exemptions removed in New Income Tax Regime

- Exemption of up to Rs 1,50,000 lakh under Section 80C for ELSS, NPS, PPF

- Exemption of up to Rs 25,000 under Section 80D for medical insurance premium

- Tax benefits for disability under Section 80DD/80DDB

- Leave travel allowance exemption to salaried employees which could be availed twice in 4 years

- House Rent Allowance to salaried individuals

- Standard deduction of Rs 50,000 to salaried taxpayers

- Entertainment allowance and Professional Tax under Section 16

- Tax benefit on interest on housing loan for a self-occupied or vacant house under Section 24

- Rs 15000 deduction from family pension under Section 57

- Tax rebate of up to Rs 12,500 on income up to Rs 5 lakh under Section 87A

- Deduction of up to Rs 2 lakh on Home Loan interest

- Tax break on interest on education loan under Section 80E

- Tax break on donations to NGOs under section 80G

- Additional deduction of up to Rs 1.5 lakh on Home Loan interest on affordable houses under section 80EEA  

- Deduction of up to Rs 1.5 lakh for on Auto Loan interest on the electric vehicle under section 80EEB

Claims under these sections will not be entertained under the new tax regime:

80C, 80CCC, 80CCD

80D, 80DD, 80DDB

80E, 80EE, 80EEA, 80EEB

80G, 80GG, 80GGA, 80GGC

80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA

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