What is the tax difference between old and new regime for a ₹18 lakh salaried filer with full deduction stack?
Scenario
Salaried filer earning ₹18 lakh annually, claiming HRA ₹2.4L, home loan interest under Section 24 ₹2L, full ₹1.5L 80C utilisation, ₹50K 80D, standard deduction ₹75K
Inputs
- Hra INR
- 2,40,000
- Section 24 INR
- 2,00,000
- Section 80c INR
- 1,50,000
- Section 80d INR
- 50000
- Total income INR
- 18,00,000
- Standard deduction INR
- 75000
- Tax slab 30 % threshold INR
- 10,00,000
Calculation
- 1.
Old regime: total deductions
₹2.4L + ₹2L + ₹1.5L + ₹50K + ₹75K → ₹6.15 L
- 2.
Old regime: taxable income
₹18L − ₹6.15L → ₹11.85 L
- 3.
Old regime: tax on ₹11.85L
₹12.5K + 20% × ₹5L + 30% × ₹1.85L → ₹1.68 L
- 4.
New regime: total deductions
₹75K standard only → ₹75,000
- 5.
New regime: taxable income
₹18L − ₹75K → ₹17.25 L
- 6.
New regime: tax on ₹17.25L per new slabs
₹20K + ₹40K + ₹60K + ₹80K + 20%×₹125K → ₹2.25 L
- 7.
Difference (old saves)
₹2.25L − ₹1.67L → ₹57,500
Conclusion
Old regime saves ~₹57,500/year (before 4% cess) for this filer because the ₹6.15 lakh deduction stack overwhelms the new regime's lower slabs and standard-deduction-only path. After cess, the gap is roughly ₹60,000.
Tradeoffs
Same filer without HRA (homeowner) or with home loan paid off: new regime would win by ~₹40-60K. The break-even is at total deductions ≈ ₹3.5-4L. Run the math annually as deductions evolve.