We find out what percentage of our income we pay as tax in the new tax regime. Take, for example, a salaried tax-payer with an income of Rs. 11 Lakhs. After accounting for the standard deduction of Rs. 75,000, the net taxable income is Rs. 10.25 Lakhs.
We will not consider any other deductions (like NPS employer contributions). Even if there were, one can assume the net taxable income factors in these deductions while using the table and chart below.
Rs. 10.25 Lakhs fall in the 15% slab. This does not mean 15% of Rs. 10.25 Lakhs is paid as tax. Here is how the tax is computed. You can use our free New Tax Regime vs Old Tax Regime Calculator to determine the tax payable.
These are the new tax regime slab rates from 1st April 2024.
- Upto ₹ 3 lakh Nil
- ₹ 3 lakh – ₹ 7 lakh 5%
- ₹ 7 lakh – ₹ 10 lakh 10%
- ₹ 10 lakh – ₹ 12 lakh 15%
- ₹ 12 lakh – ₹ 15 lakh 20%
- More than ₹ 15 lakh 30%
For a net taxable income of Rs. 10.25 Lakhs, we have
- The first Rs. 3 lakhs is tax-free.
- The next Rs. 4 lakhs is taxed at 5% = Rs. 20,000
- The next Rs. 3 lakhs is taxed at 10% = Rs. 30,000
- The remaining Rs. 25,000 is taxed at 15% = Rs. 3750
So, the total tax (before cess) is Rs. 53,570. The cess is 4% of Rs. 53,570 = Rs. 2150.
So, the total tax to be paid is Rs. 55,900. The total tax, when divided by the total income or Rs. 55,900/Rs. 11,00,000 = 5.08%. So, it is grossly incorrect (at least for lower-income slabs) to say, “I am in the 15% slab, so I pay 15% tax on my total income”.
As the income increases, this percentage increases and reaches the slab rate. For example, for an income of Rs. 16 lakhs, the tax/income percentage is 9.6% (not 30%). This gradually increases as the income increases (due to surcharge), and for an income of Rs. 88 lakhs, it becomes 30%, matching the tax slab, gradually increasing further for higher income until reaching a plateau of a little over 38%
The jumps occur around Rs. 50 Lakhs, Rs. 100 Lakhs and Rs. 200 Lakhs.
The table shows representative values.
| Taxable Income | Tax/income |
| 7,75,000 | 0.00% |
| 8,00,000 | 2.93% |
| 10,00,000 | 4.42% |
| 15,00,000 | 8.67% |
| 25,00,000 | 17.37% |
| 35,00,000 | 21.32% |
| 50,00,000 | 24.28% |
| 75,00,000 | 29.25% |
| 1,00,00,000 | 30.52% |
| 1,51,00,000 | 33.25% |
| 2,00,00,000 | 33.89% |
| 2,50,00,000 | 37.27% |
| 3,00,00,000 | 37.56% |
| 3,50,00,000 | 37.77% |
| 4,00,00,000 | 37.92% |
| 4,00,25,000 | 37.92% |
| 4,00,50,000 | 37.92% |
| 4,00,75,000 | 37.92% |
| 5,00,00,000 | 38.14% |
You can use our free New Tax Regime vs Old Tax Regime Calculator to determine the tax you need to pay
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