New Regime Tax
₹7,87,800
Old Regime Tax
₹10,37,400
You Save
₹2,49,600
Better Regime
New Regime
New Regime Tax Breakdown
Under the new regime, only the standard deduction of ₹75,000 is allowed. No other deductions like 80C, 80D, or HRA are available.
| Income Slab | Rate | Tax |
|---|---|---|
| ₹0 - ₹4,00,000 | 0% | ₹0 |
| ₹4,00,000 - ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,000 - ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,000 - ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,000 - ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,000 - ₹24,00,000 | 25% | ₹1,00,000 |
| ₹24,00,000 - ₹39,25,000 | 30% | ₹4,57,500 |
| Tax on Income | ₹7,57,500 | |
| Add: 4% Cess | +₹30,300 | |
| Total Tax Payable | ₹7,87,800 |
Old Regime Tax Breakdown
Under the old regime with only the standard deduction of ₹50,000 (no other deductions claimed). With additional deductions, the old regime tax could be significantly lower.
| Income Slab | Rate | Tax |
|---|---|---|
| ₹0 - ₹2,50,000 | 0% | ₹0 |
| ₹2,50,000 - ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,000 - ₹10,00,000 | 20% | ₹1,00,000 |
| ₹10,00,000 - ₹39,50,000 | 30% | ₹8,85,000 |
| Tax on Income | ₹9,97,500 | |
| Add: 4% Cess | +₹39,900 | |
| Total Tax Payable | ₹10,37,400 |
Analysis: New Regime is Better
For a gross salary of ₹40 Lakh with only standard deduction, the new regime saves ₹2,49,600 compared to the old regime. The new regime benefits from wider tax slabs and a higher standard deduction of ₹75,000.
The effective tax rate under the best regime is 19.7%, meaning your annual take-home (before other deductions) would be approximately ₹32,12,200 or ₹2,67,683/month.