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New vs old income tax regime: ₹1 crore to ₹5 crore salary — What’s your actual take-home pay?
The new tax regime in India offers higher take-home salaries and lower average tax rates compared to the old regime for incomes between ₹1 crore and ₹10 crore, making it a more appealing choice for high earners despite the absence of exemptions and deductions.
How much of your high salary do you take home? A comparison of India’s new and old income tax regimes for earnings between ₹1 crore and ₹10 crore highlights the significant differences in tax burden and net income. The data reveals a clear trend: the new regime typically offers a higher take-home pay. The comparison between the new and old regimes for different salary levels shows variations in tax liability and in-hand income.
₹1 crore salary: New vs old regime
“Under the new regime, a salary of ₹1 crore will result in an in-hand salary of ₹70,74,220. In contrast, under the Old Regime, the in-hand salary will be 67,99,660,” said Abhishek Soni, CEO and Co-founder of Tax2win.
₹5 crore salary: New vs old regime
“Under the new regime, a salary of ₹5 crore will result in an in-hand salary of ₹3,10,75,250. In contrast, under the Old Regime, the in-hand salary will be ₹3,07,63,250,” Abhishek Soni said.
“At a salary of one crore, the average tax rate is 29.26% in the New Regime, compared to 32% in the Old Regime. As the salary increases, the average tax rate in both regimes also increases, reaching 38.42% in the New Regime and 42.46% in the Old Regime for ₹10 crore income,” the CEO of Tax2win added.
The percentage of in-hand income is higher in the new regime at all levels. “For instance, at ₹1 crore salary, the in-hand percentage is 70.74% under the New Regime, compared to 67.99% under the Old Regime. However, as income increases, the gap narrows, with in-hand percentages of 61.58% (New) vs 57.54% (Old) at ₹10 crore,” Soni added.
The new tax regime offers slightly lower tax rates and a higher in-hand salary across different income levels, making it a more attractive option for higher-income individuals.
Old Tax Regime
- Taxpayers can avail themselves of various exemptions, deductions, and rebates, such as: Deductions under Section 80C: Up to ₹1.5 lakh for investments in PPF, EPF, etc.
- Deductions for insurance premiums, home loans, etc.
- Standard Deduction of ₹50,000.
- Rebates like 80G for donations
- HRA exemptions.
Tax slabs under the Old Regime
Up to ₹2.5 lakh – No tax
₹2.5 lakh to ₹5 lakh – 5% tax
₹5 lakh to ₹10 lakh – 20% tax
Above ₹10 lakh – 30% tax
New Tax Regime
The New Regime was introduced with simplified tax rates but without the benefits of exemptions, deductions, and rebates like the Old Regime.
Tax slabs under the New Regime
₹0 – ₹4 lakh → No Tax
₹4 lakh – ₹8 lakh → 5%
₹8 lakh – ₹12 lakh → 10%
₹12 lakh – ₹16 lakh → 15%
₹16 lakh – ₹20 lakh → 20%
₹20 lakh – ₹24 lakh → 25%
₹24 lakh & above → 30%
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First Published:11 Mar 2025, 02:25 PM IST
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