Tax Saving Old Tax Regime: In Budget 2023, while giving a big relief to the middle class, the government had announced that now people will not have to pay any tax up to Rs 7 lakh. However, if you earn more than this annually, you will have to pay tax on the total income of more than Rs 3 lakh. In such a situation, if your annual income is 9 to 12 lakh rupees, then let us know how much tax exemption you can get.
If you earn more than 7 lakhs annually, then the old tax regime is said to be better for you. Under this, you can save more tax on annual income ranging from Rs 9 lakh to Rs 10.5 lakh and Rs 12 lakh under the old tax regime.
Tax on annual income of 9 lakhs
If your annual income is Rs 9 lakh, then salaried employees can claim standard deduction of Rs 50,000. Under the new tax regime, you will have to pay income tax of Rs 40,000. If you go for the old tax regime and can claim a deduction of Rs 2,12,500, then you will have to pay tax of Rs 40,000 under the old tax regime. If you want to save more tax on this income, then you have to apply under the old tax regime. Compared to the new tax regime in the old tax regime, you can save tax up to Rs 2 lakh. If you make a deduction of up to Rs 4 lakh, then you will have to pay zero tax.
Tax on annual income of Rs 12 lakh
Under the new tax regime on an income of Rs 12 lakh, your total tax amount will be Rs 60,000. To pay the same amount as tax under the old tax regime, you would need to deduct Rs 3 lakh. The more deductions you claim under the old tax regime above Rs 3 lakh, the higher your tax savings will be as compared to the new tax regime. If you make a deduction up to Rs 7 lakh, then you will have to pay zero tax.
You can save tax under these income tax sections
If you claim tax exemption under the old tax regime, you can claim income tax exemption under section 80EEA for affordable house, section 80EEB on loan for EV, income tax exemption on education loan 80E, house rent allowance section 10(13A), section 80DDB , can claim tax exemption under section 80G.
read this also
