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A Comparative Study of India’s New Tax Regime Using Real-Life Salary Scenarios

Sparsh Dalmia, Dr. Pratiksha Mishra

Sparsh Dalmia,B.Com(Hons.)Final Year Student, Amity Business School, Amity University Chhattisgarh

Dr. Pratiksha Mishra, Assistant Professor, Amity Business School, Amity University Chhattisgarh

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Abstract

Indian's dual tax regime for income, brought in Section 115BAC of the Income Tax Act, 1961, provides a choice between the conventional deduction regime and a simplified no-exemption regime with lower slab rates. This study examines the relative cost to finances of the two regimes across three income levels—₹5 lakh, ₹10 lakh, and ₹20 lakh per annum—covering low, middle, and high-income salaried taxpayers. Applying uniform assumptions and simulation-based tax calculations, the study compares which regime produces lower tax payments and under what circumstances. The findings indicate that regime preference is sensitive to income and strongly based on the individual's use of tax deductions

Key Words:  Income Tax, Section 115BAC, Old Regime, New Regime, India, Tax Deductions, Salary Taxation, Personal Finance, Financial Planning, Tax Reform