Standard Deduction in Income Tax for Salaried Individuals 2024
How to calculate income tax payable under new tax regime
If you have decided to opt for the new tax regime for the current financial year, i.e., FY 2023-24, then here’s how to calculate the income tax payable. It is important to note that the incomes tax slabs and income tax rates have been kept unchanged for upcoming financial year 2024-25. The calculation will work in the similar fashion for next financial year as well.
For FY 2023-24 and FY 2024-25, a salaried individual can claim two deductions – i) standard deduction of Rs 50,000 from salary and pension income and ii) Section 80CCD (2) for employer’s contribution to the employee’s NPS account.
Here is an example of how to calculate income tax payable under the new tax regime.
Suppose an individual’s gross total income is Rs 20 lakh in FY 2023-24. Further, his/her employer has deposited Rs 1.5 lakh in his/her Tier-I NPS account. This makes him eligible to claim deduction under section 80CCD (2) of the Income-tax Act.
| Particulars | Amount (In Rs) |
| Gross total income | 20,00,000 |
| Standard deduction from salary/pension | (50,000) |
| Deduction under section 80CCD (2) | (1,50,000) |
| Net taxable income | 18,00,000 |
Hence, the net taxable income on which income tax payable is to be calculated will be Rs 18 lakh (Rs 20 lakh minus Rs 2 lakh).
Under the new income tax regime, income between 0 to Rs 3 lakh is exempted from tax. Hence, no tax will be payable on this income. Above this, the income left which is still chargeable to tax is Rs 15 lakh (Rs 18 lakh minus Rs 3 lakh).
The next income tax slab is above Rs 3 lakh and up to Rs 6 lakh. Thus, out of the taxable income of Rs 15 lakh, Rs 3 lakh (falling in this slab) will be taxed at 5%. The tax payable here will be Rs 15,000. Above this, the income left which is still chargeable to tax is Rs 12 lakh (Rs 15 lakh minus Rs 3 lakh).
The next income tax slab is above Rs 6 lakh and up to 9 lakh. Thus, out of the taxable income of Rs 12 lakh, Rs 3 lakh (falling in this slab) will be taxed at 10%. The tax payable here will be Rs 30,000. Above this, the income left which is still chargeable to tax is Rs 9 lakh (Rs 12 lakh minus Rs 3 lakh).
The last income tax slab is above Rs 15 lakh. Thus, the balance taxable income of Rs 3 lakh (falling in this slab) will be taxed at 30%. The tax payable here will be Rs 90,000.
| Particulars | Income (Rs) | Tax amount (Rs) |
| Net taxable income | 18,00,000 | – |
| Income exempt up to Rs 3 lakh | (3,00,000) | 0 |
| Income which is still chargeable to tax (Rs 18 lakh – 3 lakh) | 15,00,000 | – |
| Income tax slab of Rs 3 lakh and up to Rs 6 lakh | (3,00,000) | @ 5% = 15,000 |
| Income which is still chargeable to tax (Rs 15 lakh – 3 lakh) | 12,00,000 | – |
| Income tax slab of Rs 6 lakh up to Rs 9 lakh | (3,00,000) | @ 10% = 30,000 |
| Income which is still chargeable to tax (Rs 12 lakh -3 lakh) | 9,00,000 | – |
| Income tax slab of Rs 9 lakh up to Rs 12 lakh | (3,00,000) | @15% = 45,000 |
| Income which is still chargeable to tax (Rs 9 lakh -3 lakh) | 6,00,000 | – |
| Income tax slab of Rs 12 lakh up to Rs 15 lakh | (3,00,000) | @ 20% = 60,000 |
| Income which is still chargeable to tax (Rs 6 lakh-3 lakh) | 3,00,000 | – |
| Income tax slab of above Rs 15 lakh | (3,00,000) | @30% = 90000 |
| Total income tax liability | – | 2,40,000 |
| Cess at 4% on total income tax payable (i.e. on Rs 2,40,000) | – | 9,600 |
| Final income tax liability (inclusive of cess) | – | 2,49,600 |
The total tax payable amount comes to Rs 2,40,000. One must note that cess and surcharge amount is yet to be added.
Cess is levied at the rate of 4% on the income tax payable. The surcharge is applicable if the income is above Rs 50 lakh.
After adding cess of Rs 9,600, the final tax amount is Rs 2,49,600.
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