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Jul 31, 2024
New Tax Regime: Understanding the math behind Rs 17,500 annual tax savings
The math behind the Rs 17,500 annual tax savings in the new tax regime can be broken down into two parts:
Slab Rate Reduction Effect: This amounts to Rs 10,000.
Standard Deduction: An additional Rs 25,000 deduction at 30% results in Rs 7,500 savings.
Thus, the total tax savings will be Rs 10,000 + Rs 7,500 = Rs 17,500.
To illustrate this, let's consider an example. Assume Mr. A is an employee of ABC Ltd. with a salary income of Rs 24,00,000 under the new t
