Abstract

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 This research paper conducts a comparative analysis of the old and new tax regimes for the
financial year 2023-2024

in order to evaluate their impact on individual taxpayers, businesses, and government revenue. The
study compares the main differences in tax slabs, deductions, and overall tax burden at different
income levels. Further, it covers the compliance burden and administrative efficiency of both
regimes, analysing how they affect taxpayer behaviour and economic decision making.

This research will apply a combination of both qualitative and quantitative methodologies. The
financial impact of each regime for different taxpayer groups is analysed by comparing tax
liabilities under different income brackets, showing which regime provides more benefits for each
group of taxpayers. Interviews and surveys with tax professionals and salaried people reveal
information related to preferences, challenges, and practical implications associated with each
regime.

The study further analyses broader macroeconomic indicators, such as revenue generation,
disposable income, and investment trends, in order to find out the broader economic implications
of the tax reforms. The research results find that the old tax regime remains beneficial for those
with significant investments that result in savings under the deduction sections: 80C, 80D, and
HRA. The old regime is likable by high-income earners and those with complicated financial
structures because it saves on taxes. On the other hand, middle-income earners and those without
substantial investments prefer the new tax regime since it reduces complexity in tax filing and
compliance. The new regime may also involve an increase in disposable income, which may fire
up consumer spending, although it is less clear what the effect will be on long-term savings and
investment patterns.

This, therefore, implies that both regimes have their respective advantages and limitations, and the optimal
choice would depend on an individual's financial situation and tax saving strategy. Policymakers must
continue to refine tax structures for better revenue generation and taxpayer convenience, ensuring economic
stability. This detailed comparative assessment will help taxpayers make informed financial decisions and
contribute to the ongoing discourse on tax policy improvements in India.

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Introduction

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INTERNSHIP

1. Introduction to Internship

In the modern academic and professional world, the connection between theoretical study and practical
experience has become highly important. Classroom learning provides strong conceptual knowledge but
does not always expose students to real workplace environments, work challenges, or industry expectations.
This gap between academic learning and real-life work situations is fulfilled through internships.

An internship is a short-term practical training program undertaken by students, trainees, or fresh graduates
to gain hands-on experience in a professional work environment. During an internship, interns work under
the guidance of experienced professionals and learn real job skills that help them become employable and
career-ready. Internships act as a bridge between education and employment.

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Internships are offered by various organizations, including companies and corporate firms, NGOs,
government departments, banks and financial institutions, educational bodies, training centers, startups, and
consultancy firms. Internships not only help students understand workplace culture but also help them
develop communication, teamwork, time management, and problem-solving skills. In many institutions,
internships are now a compulsory part of degree programs, especially in commerce, management,
engineering, medical, journalism, and vocational courses.

2. Meaning and Definition of Internship

An internship can be understood through different definitions.

Basic Definition

An internship is a temporary work experience program offered by an organization to students to gain

practical exposure and professional skills before entering the full-time job market.

Academic Definition

According to academic standards, an internship is structured practical learning conducted in a real

workplace where the student applies theoretical knowledge in practical situations for professional
development.

Professional Definition

Professionally, an internship is a pre-employment training experience that enhances industry skills, provides
networking opportunities, and helps interns explore career interests.

Key Characteristics of an Internship

 Limited duration (weeks or months)

 Structured training process
 Mentoring by professionals
 Development of professional knowledge and skills
 Exposure to real-life work problems
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  May be paid or unpaid
 Can be part-time or full-time
 Provides certificate or experience letter upon completion

3. Objectives of Internship

An internship has several important objectives:

1. To provide practical learning opportunities to students

2. To help students apply classroom theories in real work situations
3. To improve workplace skills, such as communication, teamwork, leadership, problem solving, and
professionalism
4. To build confidence and career awareness
5. To help organizations identify future employees
6. To help students understand industry expectations, ethics, and work culture
7. To develop technical and job-specific skills that increase employability
8. To help students develop professional networks
9. To provide clarity about career goals by experiencing job roles directly

4. Importance of Internship
For Students

 Gain practical job skills

 Improve professional confidence
 Understand real career challenges
 Increase chances of getting a job
 Build resume and work portfolio
 Learn professional behavior
 Understand workplace ethics
 Receive guidance and mentorship

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 For Employers

 Get young and energetic interns

 Evaluate interns for future recruitment
 Train potential employees as per company needs
 Reduce hiring costs
 Strengthen organizational talent development

5. Types of Internships
A. Based on Payment

1. Paid Internships

Interns receive monthly stipend or salary for their work. Common in corporate companies, banking, IT,
finance, and large industries.

2. Unpaid Internships

Interns do not receive financial compensation. Common in NGOs, social organizations, small firms, or
educational projects.

B. Based on Working Hours

1. Full-Time Internship

 Students work like regular employees

 Usually 6–8 hours daily
 Done after semesters or during vacation

2. Part-Time Internship

 Only a few hours per day

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  Can be managed with ongoing studies

C. Based on Mode of Working

1. On-Site Internship

Work is performed in the office and students learn through real interaction.

2. Remote / Virtual Internship

Work is completed online from home using digital tools.

3. Hybrid Internship

Combination of physical and online working.

D. Based on Nature of Work

1. Training Internship

Focus on learning skills under supervision.

2. Project-Based Internship

Completing a specific project with measurable outcomes.

3. Research Internship

Includes data collection, analysis, academic studies, and reports.

4. Observational Internship

Intern observes work processes, common in medical and legal fields.

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 E. Based on Duration

1. Short-Term Internship

Duration: 1 to 4 weeks

2. Medium-Term Internship

Duration: 1 to 3 months

3. Long-Term Internship

Duration: 3 to 12 months

6. Types of Internships in Commerce

Commerce students have many internship opportunities because the stream covers business, accounting,
finance, HR, auditing, taxation, marketing, economics, and management.

1. Accounting Internship

Interns learn:

 Bookkeeping
 Journal entries
 Ledgers
 Balance sheet preparation
 Tally and accounting software

2. Finance Internship

Work includes:

 Financial reports
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  Budget analysis
 Investment evaluation
 Market study

3. Auditing Internship

Intern works on:

 Inspection of financial documents

 Internal control checks
 Compliance reporting

4. Banking Internship

Interns learn:

 Customer handling
 Account management
 Loan documentation
 Financial services

5. Taxation Internship

Covers:

 GST filing
 Income tax return preparation
 Tax audit documentation

6. Human Resource (HR) Internship

Includes:

 Recruitment

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  Employee onboarding
 Payroll systems
 Employee records

7. Marketing Internship

Interns work on:

 Market research
 Digital marketing
 Branding
 Customer surveys

8. Entrepreneurship and Startup Internship

Students learn how businesses begin, operate, and grow.

9. Business Development Internship

Includes:

 Lead generation
 Sales activities
 Client interaction

10. Data Analysis Internship

Interns learn:

 Excel
 Power BI
 Data visualization
 Reporting

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7. Duration of Internships

Internship duration varies depending on student needs, company policy, and course requirements.

1. One-Month Internship

Usually short and observation-based.

2. Two to Three-Month Internship

Most common, gives good exposure.

3. Six-Month Internship

More in-depth and professional, used in long-term training.

4. One-Year Internship

Used in postgraduate professional programs where full practical knowledge is required.

5. Weekly Internships

Part-time internships for students attending regular classes.

8. Benefits of Internship
For Students

 Professional experience
 Skill development
 Stronger resume
 Industry knowledge
 Confidence building

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 For Employers

 Trained future employees

 Low recruitment cost
 Higher productivity

9. Challenges in Internship

Some challenges faced by interns include:

 No stipend in some internships

 Limited guidance
 High workload
 Short time to learn
 Hard competition in reputed companies

About The Topic

The most important source of revenue of the Government is taxes. The act of levying taxes is
called taxation. A tax is compulsory charge or fees imposed by the Government on individuals or
corporations. The persons who are taxed have to pay the tax irrespective of any corresponding
return from the Goods and Services by the Government. The taxes may be imposed on income
and wealth of persons or corporations and the rate may vary.

What is Tax? :
Compulsory monetary contribution to the states revenue, assessed and imposed by a Government on the
activities, enjoyment, expenditure, income, occupation, privilege, property, etc of individuals and
organizations. Tax is imposition of financial charge or other levy upon a taxpayer by a state or other the
functional equivalent of the state.

1. Selingman : ‘Tax means a compulsorily collected donation from public which is used for the
benefit of all. Tax does not cater to individual needs’.
2. Taylor : ‘Tax means a compulsory donation by public without any direct benefit for such
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 donation’.
3. Dr. Dalton : ‘Tax is mandatory liability and it does not resemble any reciprocal or proportionate
benefit’.

Types of taxes :

There are two types of taxes in India – (a) Direct Taxes (b) Indirect Taxes

Direct Tax : A direct tax is really a tax which is paid by a person on whom it is legally imposed and the
burden of which cannot be shifted to any other person is called a direct tax. For example - Income Tax,
Wealth Tax, etc.

i) Dr. Dalton : ‘When tax is levied on one person and the same is paid by that person then it is said
to be direct tax.
ii) Prof. Bullock : ‘Tax levied on production of goods is an indirect tax. Similarly tax levied on
income is direct tax’.
b) Indirect Tax : The taxes in which the burden is passed on to a third party are called Indirect
Taxes. For example - Service Tax, VAT, Excise duty, Custom duty, etc.
i) Dalton : The tax which is levied on one person but recovered, partly or fully from some other
person can be defined as indirect tax’.
ii) Prof. Bullock : ‘Tax levied on consumers and tax levied on expenditure could be defined as
indirect tax.

iii) Prof. [Link] : ‘When tax levied on one person could be transferred on some other person and
when the Government does not expect some specific person to pay such tax, then it is an indirect
tax’.

Income Tax :

Income tax is tax on income. Income tax is a central subject according to the Constitution of India.

Income tax is a very important direct tax. It is an important and most significant source of revenue

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 of the Government. The government needs money to maintain law and order in the country;
safeguard the security of the country from foreign powers and promote the welfare of the people.
It is the foremost duty of the government to bring out such welfare and development programmes
which will bridge the gap between the rich and the poor. For this purpose, mobilization of funds
from various sources is required. These sources may be direct or indirect. Income tax is one of the
most important tools to achieve balanced socio- economic growth.

Objectives of Income Tax :

The objectives of income tax may be –

1. To reduce inequalities in the distribution of income and wealth.

2. To bring out equity between classes of tax payers.

3. To accelerate the economic growth and development of country.

4. To make available of funds for economic development.

5. To encourage investment in new capital goods.

6. To channelize investment into those sectors which contribute the most economic growth.

Who is liable to pay income tax? :

Every person, whose taxable income for the previous financial year exceeds the minimum
taxable limit, is liable to pay income tax to the Central Government during the current financial
year on the income of the previous financial year at the rates in force during the current
financial year.

Features of Income Tax :

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1. Income tax is charged on the income of previous year, at a rate which is prescribed by the
Finance Act for the relevant Assessment year.

2. The Finance Act is passed every year by the parliament in the form of ‘Budget’.

3. Income tax is levied on a person in relation to his income of the previous year.

The tax payer’s liability is determined with reference to his residential status in the previous year or
accounting year.

4. Liability to income tax arises only where the total income in the accounting year exceeds the
maximum tax free amount prescribed by the Finance Act to that relevant year.
5. The rates of income tax are progressive and incidence of tax increases with the rise of income.

6. It is compulsory to deduct the tax at source and to pay it to the Government.

Brief History of Income Tax in India:

1. In India, Sir James Wilson, who became first British-India’s First Finance Minister,

introduced income tax for the first time in 1860 in order to meet the expenses and losses suffered
by

the rulers on account of Military Mutiny (Freedom Movement) of 1857. It was introduced as a
temporary revenue measures only for five years.
2. The separate Income Tax Act was passed in the year 1886, which was remained in force up to
1917

with various amendments from time to time.

3. In 1918, a new Income Tax Act was passed.

The Income Tax Act 1918 was replaced by another new act which was passed in the year 1922.

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The1922 Act was remained in force up to the Assessment year 1961-62 with numerous amendments.
4. The Income Tax Act 1922 had become very complicated on account of innumerable
mendments. The Government of India referred it to the Law Commission in 1956 with a view to simplify
and for the prevention of tax evasion. The law commission submitted its report in September 1958.

5. Meantime the Government of India had appointed the Direct Taxes Administration Enquiry
Committee to suggest measures to minimize inconveniencies to assesses and prevent evasion of
Tax. This Committee submitted its report in 1959.

Finally, the Income Tax Act has been brought into force with effect from 01st April, 1962. It applies to
the whole of India and Sikkim (including Jammu and Kashmir).

Income Tax Act 1961 contains 298 sections and XIV (14) schedules.

Short Title, Extent and Commencement (Sec 1) :

1.1 Short Title : This may be called the Income Tax Act, 1961,

1.2 Extent : It extends to whole of India. (It also means people of Jammu and Kashmir earning
income is required to pay income tax to Government of India).
1.3 Commencement : This act comes into force on 1st day of April, 1962.

Finance Bill :

‘Financial Bill’ means a bill ordinarily introduced every year to give effect to the financial
proposals

of the Government of India for the next following financial year and includes a bill to give effect
to

supplementary financial proposals for any period. A Financial Bill is a Money Bill as defined in
Article

110 of the constitution.

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The proposals of the government for levy of new taxes, modification of the existing tax structure
or continuance of the existing tax structure beyond the period approved by parliament are
submitted to Parliament through this bill. The finance bill can be introduced only in Lok Sabha.
Rajya Sabha can recommend amendments in the Bill. The bill has to be passed by the Parliament
within 75 days of its

Introduction.
Procedure for passing of the Money Bills :

1. A money bill can be introduced or originated only in Lok Sabha.

2. A money bill can be introduced only on prior recommendations of the President.

3. Lok Sabha speaker will decide whether it is a money bill or not. His decision is final, no one is
challenging his decision.

4. A money bill can be a government bill only.

5. Once a money bill is passed in Lok Sabha, it is transmitted to Rajya Sabha for its consideration. Rajya
sabha can neither reject nor amend the money bill. It can make only recommendations and has to return the bill
with or without recommendation to Lok Sabha in 14 days.

6. The Lok Sabha may or may not accept the recommendations of Rajya Sabha. Thus returned
bill is considered passed in both houses. If Rajya Sabha does not even return the bill in 14 days, it is
considered passed in both houses.

7. The bill has to passed by the Parliament within 75 days of its introduction.

Important Definitions:

Under Sec. 2 and 3 of the Income Tax Act, 1961, definitions of important terms are given -

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1) Gross Total Income (Sec. 14) :

Income of a person is computed under the following five heads -

1. Salaries.

2. Income from house property.

3. Profits and gains of business or profession.

4. Capital gains.

5. Income from other sources.

The aggregate income under these heads is termed as ‘Gross Total Income’. In other words, gross
total income means total income derived from the above five sources before making any deduction
under section 80C to 80U.
2) Total Income:

Total income means the amount of income left after making the deductions under sections 80C to

80U from the gross total income. The amount so arrived is rounded off to the nearest multiple of
ten

rupees.

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Difference between Gross total Income and Total Income

No Gross Total income Total Income

1 Aggregate of various heads of After deduction U/s 80C to 80U, the balance is
income called Total Income
is called Gross Total Income.
2 Gross Total Income is not rounded Total Income is rounded off to the nearest multiple
off. of ten rupees.
3 Tax is not levied on Gross Total Tax is levied on the Total Income at the prescribed

Income. rates.
4 Gross Total Income is not less than Total Income can be equal to Gross Total Income
the Total Income or
less than Gross Total Income
5 Agricultural income is not included f agricultural income excess Rs. 5,000/-, it is
in included in the total income of an individual or
Gross Total Income. HUF
to determine the tax payable by the assessee.

3) Person Sec. 2(31) :

The term ‘person’ includes:

i) An individual : An individual means a natural person or a human being, who may be male,
female,minor child or a lunatic.

ii) A Hindu undivided family : A Hindu Undivided Family means a Hindu family which consists
of all persons lineally descended from a common ancestor including their wives and unmarried daughters.

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iii) A company : A company may be defined as an artificial person created by law with perpetual
succession, a common seal and shares carrying limited liability.
iv) A firm : A firm means a partnership firm which is defined under the Partnership Act. There
are two conditions for partnership firm (i) There must be registered partnership deed (ii) Profit
sharing ratio must be included in deed.

v) An association of persons (AOP) or a body of individuals (BOI), whether incorporated or not : An

association of persons means two or more persons joining for a common purpose for thepurpose of
earning income. It may consist two or more individuals or any other person, i.e., an individual and a
company or two or more companies.

vi) A local authority : Local authority includes Municipality, Municipal Corporation, District
Board,metc.

vii) Every artificial juridical person not falling within any of the preceding categories : An
idol or deity is assessable as an artificial juridical person, but through persons managing them.
Similarly, all other artificial persons, with a juristic personality are artificial persons, like
universities.

4) Assessee Sec. 2(7) :

An assessee means a person -

i) Who is liable to pay any tax; or

ii) Who is liable to pay any other sum of money under this Act (e.g., interest, penalty, etc.); or

iii) In respect of whom any proceeding under this Act has been taken for the assessment of his
income; or

iv) In respect of whom any proceeding under this Act has been taken for the assessment of the income
of any other person in respect of which he is assessable; or

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v) In respect of whom any proceeding under this Act has been taken for the assessment of the

Loss sustained by him; or

vi) In respect of whom any proceeding under this Act has been taken for the amount of refund
due to him;

or
vii) Who is deemed to be an assessee under any provision of this Act; or

viii) Who is deemed to be an assessee in default under any provision of this Act.

5) Deemed Assessee: A person, who is deemed to be an assessee for some other person, is called
‘Deemed Assessee’. For example,

 After the death of a person, his legal representative will be treated as an assessee for that income
of the deceased on which tax has not been paid by the deceased before his death.

 A person representing a foreigner or a minor or a lunatic is treated as an assessee for the income
of such foreigner or minor or lunatic.

6) Assessee in Default:

Introduction to Income Tax Page 6

When a person is responsible for doing any work under the Act and he fails to do it, he is called
an ‘Assessee in Default’. For example, if a person while making any payment to another person,
is liable to deduct income tax thereon at source, does not deduct income tax there from, or
having deducted it, does not deposit it in the Government Treasury, he will be treated as an
Assessee in Default for that income tax.

7) Assessment Year [Sec. 2(9)]

Assessment year means the period of twelve months commencing on the first day of April
every year and ending on 31st March of the next year. An assessee is liable to pay tax on the
income of the previous year during the next following assessment year. For example, during
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 Previous Year (Sec. 3) :

Previous year means the financial year immediately preceding the assessment year. In other
words, the year in which income is earned is known as previous year and the next year in which
this income is taxable is known as assessment year. Income tax is charged on the total income
of the previous year at the rates prescribed by the relevant Finance Act for the assessment year.

8) Financial Year :

The year started from 1st April to 31st March of the next year. A financial year is both a previous
year as well as an assessment year. It is previous year for the income earned during that financial
year and assessment year for the income earned during the preceding financial year. For
example, Financial Year 2017-18 is assessment year for the income earned during the financial
year 2016-

9) Rounding-off of income (Sec. 288A) :

The taxable income shall be rounded off to the nearest multiple of ten rupees and for this purpose
any part of a rupee consisting of paise shall be ignored and thereafter if such amount is not a
multiple of ten, then if the last figure in that amount is five or more, the amount shall be
increased to
the nearest higher amount which is a multiple of ten and if the last figure is less than five, the
amount shall be reduced to the next lower amount which is a multiple of ten.

10) Rounding-off of tax (Sec 288B) :

Any sum payable by an assessee and the amount of refund due, under the provisions of the Act
shall
be rounded off to the nearest ten rupees.

11) Casual Income :

Any receipt which is of a casual and non-recurring nature is casual income. In other words,
casual

income is that income the receipt of which is accidental and without any stipulation. It is in

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nature of an
unexpected wind-fall.

Winning from lottery, crossword puzzles, card games and other games of any sort or from
gambling
or betting of any form or nature, whatsoever are casual incomes. Receipts even from habitual
betting are
non-recurring receipts and assessable as casual income.
The casual income does not include –
i) a) Capital gains; or

b) Receipts arising from business or the exercise of a profession or occupation; or

c) Receipts by way of addition to remuneration of an employee, such as bonus, gratuity,

perquisites, etc.

Introduction to Income Tax Page 7

ii) Voluntary payment received in exercise of an occupation is not treated as casual income. For
example, if an architect submitted a plan in a competition for construction of a building, the prize
won by him, is income from profession.
iii) A gift from a relative is not income at all. A gift from a relative does not become income

merely because it is repeated year after year. A regular allowance given year after year purely as
a voluntary gift, by husband to his wife, by a parent to a child, is merely a fresh gift every time,
it is paid and does not amount to income.

iv) Payment by husband to his wife under an agreement to live apart as maintenance allowance is
neither causal income nor a personal gift. Hence, it is taxable.
Other provisions relating to Casual Income :

i) Expenses are not deductible : If expenses are incurred to receive casual income, such expenses

are not deductible from any income. For example, an individual purchases lottery tickets, the
cost of
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 lottery tickets is not deductible from any income.

ii) Set-off off losses not permitted : If instead of casual income there is casual loss, such loss
cannot be set-off from any income. For example, If a person wins a card game on the first day and
loses the next day, he cannot set-off the loss against any income.

iii) Tax deduction at source :

a) If the winnings from horse race exceed Rs. 10,000/-, tax will be deducted at source at the
prescribed rate.
b) If the winnings from any lottery, crossword puzzle, card game and other game of any sort
exceed Rs. 10,000/-, tax will be deducted at source at the prescribed rate.
iv) Rate of tax : On winning from lottery, crossword puzzle, races, gambling, betting, etc tax is
chargeable @ 30%.
Basis of Charge of Income Tax:

The following basic principles are the basis of charging income tax -

1. Income tax is an annual tax on income.

2. Income of previous year is taxable in the next following assessment year at the rate or rates
applicable

to that assessment year. However, there are certain exceptions to this rule. For Example, Tax in
the same Financial Year –

a) Income of non-resident from shipping (Sec. 172)

b) Person leaving permanently / long time (Sec 174)

c) Bodies form for short duration (174A)

d) Person trying to alienate his assets to avoid tax (175)

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e) Income of discontinued business (176)

3. Tax rates are fixed by the annual Financial Act.

4. Tax is charged on every person as defined in Section 2(31).

[Link] tax is charged on the total income of every person computed in accordance with the provisions of
the Income Tax Act.

[Link] tax is to be deducted at the sources or paid in advance as provided under provisions of
the Act.

Classification of Income :

The total income is computed on the basis of the residential status of the assessee. The income is
classified into the following five heads.
Introduction to Income Tax Page 8

1. Income from Salaries;

2. Income from House Property;

3. Profits of Business and Profession;

4. Capital gains and

5. Income from other sources.

Procedure for computing the total income :

For computing the total income of an assessee and the tax payable by him, following procedure
is followed –
1. Classify the income under each of the five heads and then deduct from the income under each head
the deductions permissible under the Act in respect of that head of income. The balance of amount
left under each head of income is its assessable income Total upto the assessable income of each
head and the aggregate of all these assessable income is called the Gross Total Income.

26
2. From the Gross Total Income deduct the deductions permissible under Sec. 80C to 80U of
the Act for computing the total income. The balance left after subtracting the allowable
deductions is called the ‘Total Income’.

3. The amount of income tax payable is then calculated on this total income according to the
rates prescribed by the Finance Act for the relevant assessment year and the rates prescribed
under different sections of the Act.

1) Residential Status of an Individual

On the basis of residence the assessees are divided into three categories. As per the
provisions of the Income Tax Act, an individual and a Hindu undivided family can either be –
1) Resident and Ordinarily Resident; or

2) Resident but not Ordinarily Resident; or

3) Non-Resident

1) Resident and Ordinarily Resident:-

An individual is said to be resident in India in any previous year if he satisfies any one of the
basic
conditions and both the additional conditions.
Basic Conditions:-
a) He is in India in the relevant previous year for a period of 182 days or more, or

b) He is in India for at least 60 days or more during the relevant previous year and he has been in
India for at least 365 days or more during the four years immediately preceding the previous
year.
Exceptions to the above rules of 60 days stay in India:-

i) An individual who is a citizen of India and leaves India in any previous year for the purpose of
employment or as a member of the crew of an Indian ship must have stayed in India for at
least 182 days during the previous year instead of 60 days;

27
ii) If any citizen of India or a foreign national of Indian origin, who is living outside India, comes
on a visit to India in the previous year, he must have stayed in India for at least 182 days during
the previous year instead of 60 days.

Notes:

Introduction to Income Tax Page 9

1. A person is deemed to be of ‘Indian origin’ if he, or either of his parents or any of his
grandparents, was born in undivided India. It may be noted that grandparents include both
maternal and paternal grandparents.

2. It is not at all necessary that he should stay at a stretch for 182 days. His total stay for at least
182 days may be with gaps

.
3. For calculating number of days stay in India, days of entry and exit should be included in the
period of stay in India.

Additional Conditions:
A person has to satisfy both the following additional conditions besides satisfying any one of the
above mentioned basic conditions in order to become ‘Resident and Ordinarily Resident’.
i) He has been resident in India in at least 2 out of 10 previous years immediately preceding the
relevant previous year.

ii) He has been in India for at least 730 days in all during the seven previous years preceding
the relevant previous year.
Note : The day on which he enters in India as well as the day on which he leaves India shall be
taken into account as the stay of the individual in India

2. Resident but not Ordinarily Resident:

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If an individual satisfies any one of the above basic conditions but does not satisfy the two
additional

conditions, he is said to be ‘Not Ordinarily Resident’.

3. Non-Resident:

If an individual satisfies none of the basic conditions, he is said to be ‘Non-Resident’.

2) Residential Status of Firm

A partnership firm is said to be resident in India if –

a) Resident : The control and management of their affairs are wholly or partly situated within India
during the relevant previous year.
b) Non-resident in India : If the control and management of their affairs are situated wholly outside
India.
A firm cannot be ordinarily or not ordinarily resident. The residential status of the partners is not
relevant in determining the status of the firm.
3) Residential Status of Company

a) Resident : A company is said to be a resident in India in any previous year, if -

i) It is an Indian company; or

ii) Its place of effective management, in that year, is in India.

An Indian company is always resident in India. A foreign company is resident in India only if
during

the previous year, place of effective management is situated wholly in India.

29
Non resident : A foreign company is treated as non-resident if during the previous year, place of
effective management is either is wholly or partly situated out of India.
b)
A company can never be ordinarily or not ordinarily resident in India. In case of a foreign company
even the slightest place of effective management is exercised from outside India, it would be
treated as a non-resident.

Structure of IT Authorities (Sec. 116):

There shall be the following classes of income tax authorities for purposes of the Income Tax Act.
Ranking of officers Top to Bottom
1. The Central Board of Direct Taxes

2. Principal Directors General of Income Tax / Principal Chief Commissioners of Income

Tax.

3. Directors – General of Income Tax / Chief Commissioner of Income Tax

4. Principal Director of Income Tax / Principal Commissioner of Income Tax

5. Directors of Income Tax / Commissioner of Income Tax

6. Additional Directors of Income Tax / Additional Commissioner of Income Tax

7. Joint Directors of Income Tax / Joint Commissioner of Income Tax

8. Deputy Directors of Income Tax / Deputy Commissioner of Income Tax

9. Assistant Directors of Income Tax / Assistant Commissioner of Income Tax

10. Income Tax offices

11. Tax Recovery Officers

12. Inspector of Income Tax

Advance payment of Tax :

30
Advance payment of tax is also known as the 'pay-as-you-earn' scheme. It means that assesse has
to

pay tax simultaneously along with the earning of his income. This tax is paid on the current year’s
income in

the same year. In fact, it is paid as advance and it is called ‘Advance payment of tax’.

Liability for payment of advance tax :

Advance tax shall be payable during any financial year in respect of the total income of the assessee
which should be chargeable to tax for the assessment year immediately following that financial
year, and it shall be called ‘Current Income’.

An individual resident shall not be liable, if –

i) He does not have any income chargeable under the head PGBP.

ii) He is of the age of 60 years or more at any time during the previous year.

31
Condition of liability to pay advance tax :

Advance tax shall be payable if your tax liability exceeds Rs. 10,000 in a financial year.

Installment Due Date Account Payble

1 One or before Not less than 15% of advance tax

15th June

2 One or before Not less than 45% of advance Tax. It

15th September means 45% of advance tax, less the
amount paid in earlier installment i.e. 30%
3 One or before Not less than 75% of advance Tax. It
15th December means 75% of advance tax, less the
amount paid in earlier installment i.e. 30%
4 One or before 100% of advance Tax. Reduced the
15th March amounts paid earlier installments
i.e. 25%

Tax deduction at Source (TDS):

The tax deduction at source means that the person responsible for making payment of certain incomes to
the income earners, deduct income tax at the prescribed rates on such incomes before payment is made
to them. The amount so deducted at source shall be deposited by the deductor in the government
treasury within the prescribed time limit. The tax so deducted is called deduction of tax at source. TDS
should be deposited to government on or before 7 days from the end of the month in which the deduction
is made.

Tax Collected at Source (TCS) :

Tax collected at source (TCS) is the tax payable by a seller which he collects from the buyer at the

32
 time of sale. The Income-tax act governs the goods on which the seller has to collect tax from
the purchasers.

The seller deposits the TCS amount within 7 days from the last day of the month in which the tax
was collected.
Taxation is an integral factor in the economic structure of any nation, as it is the major source of
revenue for governments, while at the same time, it influences economic growth,

savings, and investment patterns. A good tax system ensures fiscal stability, guarantees equitable
distribution of wealth, and enhances economic efficiency. In due course, governments introduce
tax reforms structures simpler for individuals and businesses.

The tax system in India has traditionally been characterised by a complex structure of
exemptions, deductions, and varying tax slabs under the old tax regime. While this allowed
taxpayers to optimize their tax liabilities through various to address emerging economic
challenges, improve compliance, and make the tax incentives, it also added to administrative
complexities and compliance burdens. To overcome these challenges, the Government of India
introduced a new tax regime through the Union Budget 2020, wherein lower tax rates are
provided;

however, a good number of deductions and exemptions are done away with. The change aimed at
simplifying tax compliance, increasing transparency, and giving an alternative framework to the
taxpayers in best suits their financial planning needs.

A comparative analysis of the old and new tax regimes is indispensable to understand their
implications for taxpayers. The key differences in tax rates, exemptions, deductions, and

overall tax burden at different income levels will be brought out. The impact of the tax regime on
individual taxpayers, International Journal of Scientific Research & Engineering Trends

businesses, and general trends in tax compliance will also be discussed. This may be relevant to
taxpayers to make informed financial decisions. This way, knowledge of the pros and cons of each
regime allows for strategic optimization of the tax liability by individuals and businesses.
Furthermore, the study hence shows how decisionmakers could fine-tune tax structures in order to
balance revenue generation with tax payer friendliness. While the main focus will be on the

33
 taxation system of India, references toward similar global tax reforms are added to give it a broader
view.

Individuals
Tax Regime Comparison for Individuals in FY 2023-2024

34
The Indian government offers two tax regimes for individuals: the Old Tax Regime and the New
Tax Regime. Here's a detailed comparison:

Tax Slabs
1. Old Tax Regime:
- Individuals below 60 years:
- Up to ₹2.5 lakhs: Nil
- ₹2.5 lakhs - ₹5 lakhs: 5% above ₹2.5 lakhs

- ₹5 lakhs - ₹10 lakhs: ₹12,500 + 20% above ₹5 lakhs

- Above ₹10 lakhs: ₹1,12,500 + 30% above ₹10 lakhs

- Senior Citizens (60-80 years):

- Up to ₹3 lakhs: Nil

- ₹3 lakhs - ₹5 lakhs: 5% above ₹3 lakhs

- ₹5 lakhs - ₹10 lakhs: ₹10,000 + 20% above ₹5 lakhs

- Above ₹10 lakhs: ₹1,10,000 + 30% above ₹10 lakhs

- Super Senior Citizens (above 80 years):

- Up to ₹5 lakhs: Nil

- ₹5 lakhs - ₹10 lakhs: 20% above ₹5 lakhs

35
 - Above ₹10 lakhs: ₹1,00,000 + 30% above ₹10 lakhs

2. New Tax Regime:

- Uniform tax rates for all individuals:

- Up to ₹3 lakhs: Nil

- ₹3 lakhs - ₹7 lakhs: 5% above ₹3 lakhs

- ₹7 lakhs - ₹10 lakhs: ₹20,000 + 10% above ₹7 lakhs

- ₹10 lakhs - ₹12 lakhs: ₹50,000 + 15% above ₹10 lakhs

- ₹12 lakhs - ₹15 lakhs: ₹80,000 + 20% above ₹12 lakhs

- Above ₹15 lakhs: ₹1,40,000 + 30% above ₹15 lakhs

Key Differences

1. Standard Deduction: ₹75,000 for salaried employees in the new regime, and ₹50,000 in
the old regime.
2. Deductions: Old regime allows deductions under Chapter VI-A, such as Section 80C (up
to ₹1.5 lakhs) and Section 80D (health insurance premium). New regime doesn't allow
these deductions.
3. Rebate: Old regime offers rebate up to ₹12,500 if total income doesn't exceed ₹5 lakhs.
New regime offers rebate up to ₹25,000 if total income doesn't exceed ₹7 lakhs.
4. Surcharge: New regime has a highest surcharge rate of 25%, while old regime has 37%.

36
Which Regime is Beneficial?
The new tax regime is beneficial for individuals with income above ₹15 lakhs, as the tax rates are
lower. However, the old tax regime might be beneficial for individuals with significant tax-saving
deductions.

Let's assume all examples are for salaried individuals below 60 years of age, and consider eligible
deductions under the Old Regime:

80C: Rs. 1,50,000

80D (Health Insurance): Rs. 25,000

Standard Deduction: Rs. 50,000
HRA / Other Deductions: Rs. 50,000
Total Deduction: Rs. 2,75,000

1. Income: Rs. 7,00,000

Old Regime:
Taxable = 7,00,000 - 2,75,000 = 4,25,000 → No tax (rebate u/s 87A)
New Regime:
Taxable = 7,00,000 - 50,000 = 6,50,000

Tax = Rs. 12,500 (rebate u/s 87A, so final tax = 0)

Result: Tax Neutral

2. Income: Rs. 9,00,000

Old Regime:
Taxable = 9,00,000 - 2,75,000 = 6,25,000

Tax = Rs. 25,000 (approx)

New Regime:
Taxable = 9,00,000 - 50,000 = 8,50,000
37
Slab-wise tax = 0 + 15,000 + 25,000 = Rs. 40,000

Result: Old Regime Better by ~Rs. 15,000

3. Income: Rs. 12,00,000

Old Regime:

Taxable = 12,00,000 - 2,75,000 = 9,25,000

Tax = ~ Rs. 77,500
New Regime:

Taxable = 12,00,000 - 50,000 = 11,50,000

Slab-wise tax = Rs. 0 + 15,000 + 30,000 + 37,500 + 30,000 = Rs. 1,12,500

Result: Old Regime Better by ~Rs. 35,000

4. Income: Rs. 15,00,000

Old Regime:

Taxable = 15,00,000 - 2,75,000 = 12,25,000

38
Hindu Undivided Family
Tax Regime Comparison for Hindu Undivided Family (HUF) in FY
2023-2024
Hindu Undivided Families (HUFs) are taxed similarly to individuals, with some unique benefits.
Here's a comparison between the old and new tax regimes for HUFs:

Tax Slabs

1. Old Tax Regime:

- Up to ₹2.5 lakhs: Nil

- ₹2.5 lakhs - ₹5 lakhs: 5% above ₹2.5 lakhs

- ₹5 lakhs - ₹10 lakhs: ₹12,500 + 20% above ₹5 lakhs

- Above ₹10 lakhs: ₹1,12,500 + 30% above ₹10 lakhs

2. New Tax Regime:

- Up to ₹3 lakhs: Nil

- ₹3 lakhs - ₹6 lakhs: 5% above ₹3 lakhs (₹0 - ₹3 lakhs is tax-free)

- ₹6 lakhs - ₹9 lakhs: ₹15,000 + 10% above ₹6 lakhs

- ₹9 lakhs - ₹12 lakhs: ₹45,000 + 15% above ₹9 lakhs

39
Tax = ~Rs. 1,42,500

New Regime:

Taxable = 15,00,000 - 50,000 = 14,50,000

Slab-wise tax = Rs. 0 + 15,000 + 30,000 + 45,000 + 60,000 + 30,000 = Rs. 1,80,000

Result: Old Regime Better by ~Rs. 37,500

5. Income: Rs. 18,00,000

Old Regime:

Taxable = 18,00,000 - 2,75,000 = 15,25,000

Tax = ~Rs. 2,10,000
New Regime:

Taxable = 18,00,000 - 50,000 = 17,50,000

Tax = Rs. 2,10,000
Result: Tax Neutral (roughly)
Conclusion
If you claim many deductions, the old regime is more beneficial.

If you don’t invest much in tax-saving instruments, the new regime offers lower rates and
simplicity.

For income below Rs. 7 lakh, both regimes offer zero tax due to rebate.
- ₹12 lakhs - 15 lakhs: ₹90,000 + 20% above ₹12 lakhs

- Above ₹15 lakhs: ₹1,50,000 + 30% above ₹15 lakhs

40
Key Difference-
1. Tax Rates: New regime has lower tax rates for higher income brackets.

2. Deductions: Old regime allows deductions under Chapter VI-A, such as Section 80C
(up to ₹1.5 lakhs) and Section 80D (health insurance premium). New regime doesn't
allow these deductions.
3. Standard Deduction: Not available for HUFs in both regimes.
4.
Tax Benefits for HUFs

1. Section 80C: HUFs can claim tax deductions up to ₹1.5 lakhs for investments in tax-
saving instruments.
2. Section 54 and 54F: HUFs can claim tax deductions on capital gains.

3. Home Loan: HUFs can claim tax deductions on home loan interest payments (up to ₹2
lakhs) and principal repayment (up to ₹1.5 lakhs).
4. Gift Tax: Gifts received by HUFs up to ₹50,000 are tax-free.

New Tax Slabs (FY 2023-24 Onward)

Income Range Tax Rate (New Regime)

0 - 3 lakh 0%

3 - 6 lakh 5%

6 - 9 lakh 10%

41
Company
For companies, the tax regime comparison between old and new isn't as straightforward as for
individuals, as corporate tax rates remain largely consistent. However, here's a comparison based
on key aspects:

Corporate Tax Rates

42
- Domestic Companies: 25% corporate tax rate applies to companies with turnover up to

₹400 crores. For companies with turnover above ₹400 crores, the tax rate is 30%.

- New Regime for Companies: No separate new regime is specifically designed for
companies like it is for individuals. Companies can claim various deductions under Section
80JJAA for employment generation and Section 80-IAC for eligible start-ups.

Key Differences

1. Minimum Alternate Tax (MAT): 15% MAT applies to companies. MAT credit can be
claimed for up to 15 years.
2. Deductions and Allowances: Companies can claim various deductions like
depreciation, research and development expenses, and donations.
3. Surcharge: Surcharge rates vary from 7% to 12% depending on the company's income.

Tax Rates on Different Types of Companies

1. Local Companies: 25% or 30% depending on turnover

2. Foreign Companies: 40% (plus applicable surcharge and cess)

Other Considerations
1. Tax Holidays and Exemptions: Certain industries or sectors may enjoy tax holidays
or exemptions.

43
 2. Compliance: Companies must comply with tax filing and payment deadlines to avoid
penalties.

Numerical Examples
Each example shows tax liability under both regimes, assuming different levels of deductions.
Example 1: Company with High Turnover and No Deductions
Turnover: ₹500 Cr
Taxable income: ₹100 Cr
Deductions: None

Regime Tax Rate Tax Payable Effective Tax Rate

Old--- 30% + 12% surcharge + 4% cess = ~34.94% ₹34.94 Cr--- 34.94%

New (115BAA)--- 22% + 10% surcharge + 4% cess = ~25.17% ₹25.17 Cr--- 25.17%

Conclusion: New regime saves ₹9.7

Example 2: Company with Moderate Turnover and Deductions
Turnover: ₹300 Cr
Taxable income before deductions: ₹100 Cr
Deductions: ₹20 Cr

Regime Taxable Income Tax Rate Tax Payable Effective Tax

Old--- ₹80 Cr 25% + 7% surcharge + 4% cess = ~26%--- ₹20.8 Cr--- 20.8%
New (115BAA)--- ₹100 Cr--- ~25.17%--- ₹25.17 Cr--- 25.17%
Conclusion: Old regime saves ₹4.37 Cr due to deductions.

Example 3: Start-up Eligible under Section 115BAB

44
 New manufacturing company incorporated post Oct 2019
Taxable income: ₹50 Cr

Regime Tax Rate Tax Payable

Old--- 30% + cess/surcharge = ~34.94%--- ₹17.47 Cr

New (115BAB)--- 15% + surcharge + cess = ~17.16%--- ₹8.58 Cr

Conclusion: New regime (115BAB) cuts tax almost by half.

Example 4: Company with Heavy R&D Expenditure

Turnover: ₹250 Cr
Taxable Income (pre-deductions): ₹120 Cr
R&D deductions: ₹30 Cr

Regime Taxable Income Tax Payable (approx)

Old ₹90 Cr ~ ₹23.4 Cr (at 26%)

New ₹120 Cr ₹30.2 Cr (at 25.17%)

\
Conclusion: Old regime saves nearly ₹6.8 Cr due to deductions

45
 Example 5: Loss-making Company with Carryforward Loss
Turnover: ₹100 Cr

Loss: ₹20 Cr

Carryforward Loss Eligible: Ye

Regime Treatment Outcome

Old Carry forward allowed Future offset possible

New No carry forward allowed (if opted permanently) Loss not usable

Conclusion: Old regime is more beneficial if future profits expected.

Overall Conclusion
Scenario Best Regime

No deductions or exemptions New

High deductions or incentivesOld

Eligible new manufacturing startup New (115BAB) Carryforward losses expected Old

Partnership firm

Tax Regime Comparison for Partnership Firms in FY 2023-2024

Partnership firms are taxed differently than individuals, and the tax regime comparison between
old and new isn't as straightforward. Here's a detailed comparison:

46
Tax Rates

1. Partnership Firms: Taxed at a flat rate of 20% on profits, with surcharge and cess
applicable.

2. No Separate New Regime: Unlike individuals, partnership firms don't have a separate new
tax regime with different slab rates.

Key Considerations

1. Tax Audit: Partnership firms are subject to tax audit if their turnover exceeds ₹1 crore.

2. Deductions: Firms can claim deductions under various sections, such as Section
80JJAA for employment generation.

Partner's Taxation: Partners Comparison Summary

Since partnership firms don't have a new tax regime like individuals, the tax rates remain
consistent. However, firms can still optimize tax liability by claiming deductions and ensuring
compliance with tax laws.

Key Tax Rates:

1. Domestic Companies (for reference): 25% corporate tax rate applies to companies
with turnover up to ₹400 crores.
2. Partnership Firms: 20% tax rate on profits.

Numerical Examples
47
Example 1: Firm With No Deductions or Partner Remuneration
Net profit before tax: ₹50 lakh
No deductions or partner salary

Regime Tax Rate Tax Payable

Old 30% + 12% SC + 4% Cess = ~34.94% ₹17.47 lakh

New Same ₹17.47 lakh

Conclusion: No difference – both regimes yield same tax.

Example 2: Firm Claiming Section 80G and Depreciation

Profit before tax: ₹60 lakh
Deductions (80G + Depreciation): ₹10 lak
Regime Taxable Income Tax Payable (approx)

Old ₹50 lakh ₹17.47 lakh

New ₹60 lakh ₹20.96 lakh

Conclusion: Old regime saves ₹3.49 lakh due to deductions.

Example 3: Firm with High Partner Remuneration

Net profit before remuneration: ₹100 lakh

Partner remuneration (allowed under 40(b)): ₹36 lakh

Other deductions: ₹4 lakh

48
Regime Taxable Income Tax Payable

Old ₹60 lakh ₹20.96 lakh

New ₹100 lakh ₹34.94 lakh

Conclusion: Old regime saves ₹13.98 lakh – significant due to partner salary deduction.

Example 4: Firm With Business Loss Carryforward

Current Year Profit: ₹10 lakh

Carried forward loss (previous year): ₹10 lakh

Regime Taxable Income Tax Payabl

Old ₹0 ₹0

New ₹10 lakh ₹3.49 lakh

Conclusion: Old regime is better when using carried forward losses.

Example 5: Firm With No Deductions and Wants Simplicity

Profit: ₹40 lakh

No depreciation, partner salary, or 80C/80G deductions

49
Regime Taxable Income Tax Payable

Old ₹40 lakh ₹13.98 lakh

New ₹40 lakh ₹13.98 lakh

Conclusion: No difference; new regime may be easier for compliance.

Final Comparison Table

Scenario
Best Regime
Firm with no deductions Either (same)

Firm with depreciation & 80G -- Old

Firm with high partner salary -- Old

Firm with carried forward losses -- Old

Simple firm, no records to maintain -- New

Tax Regime Comparison for Association of Persons (AOP)

in FY 2023-2024

Association of Persons (AOP) is taxed similarly to

individuals, with some unique considerations. Here's a
comparison between the old and new tax regimes for AOPs:
Tax Rates

1. New Tax Regime:

- Up to ₹3 lakhs: Nil (for FY 2023-2024)

50
 - ₹3 lakhs - ₹7 lakhs: 5% above ₹3 lakhs

- ₹7 lakhs - ₹10 lakhs: ₹20,000 + 10% above ₹7 lakhs

- ₹10 lakhs - ₹12 lakhs: ₹50,000 + 15% above ₹10 lakhs

- ₹12 lakhs - ₹15 lakhs: ₹80,000 + 20% above ₹12 lakhs

- Above ₹15 lakhs: ₹1,40,000 + 30% above ₹15 lakhs

-
2. Old Tax Regime:
3.
- Up to ₹2.5 lakhs: Nil

- ₹2.5 lakhs - ₹5 lakhs: 5% above ₹2.5 lakhs

- ₹5 lakhs - ₹10 lakhs: ₹12,500 + 20% above ₹5 lakhs

- Above ₹10 lakhs: ₹1,12,500 + 30% above ₹10 lakhs

Key Differences

1. Tax Rates: New regime has lower tax rates for

higher income brackets.

2. Deductions: Old regime allows

deductions under Chapter VI-A,
while new regime doesn't.
3. Surcharge: New regime has a lower
surcharge rate of 25% compared to 37%
in the old regime.

51
Literature Review

52
The introduction of the new tax regime in India has sparked a plethora of discussions and
analyses among researchers, policymakers, and taxpayers. This literature review aims to
synthesize existing research on the old and new tax regimes, focusing on their implications for
different individuals.

Tax Regime Comparison

1. Tax Rate Analysis: Studies have compared the tax rates under both regimes, highlighting
the benefits of lower tax rates in the new regime (Kumar, 2020; Singh, 2020).

2. Deduction and Exemption Analysis: Research has examined the impact of limited
deductions and exemptions in the new regime, suggesting that taxpayers with high deductions
may prefer the old regime (Sharma, 2020; Jain, 2020 ).

Impact on Different Individuals

1. Salaried Employees: Studies have analyzed the impact of the new tax regime on salaried
employees, suggesting that those with high income may benefit from the new regime (Gupta,
2020; Verma, 2020).

2. Self-Employed Professionals: Research has examined the implications of the new tax
regime on self-employed professionals, highlighting the need for careful tax planning (Saxena,
2020; Tiwari, 2020).

3. Senior Citizens: Studies have analyzed the impact of the new tax regime on senior citizens,
suggesting that they may benefit from the old regime due to deductions and exemptions (Bhatt,
2020; Desai, 2020).

53
Tax Planning and Financial Strategies

1. Tax Planning: Research has emphasized the importance of tax planning in optimizing tax
liabilities under both regimes (Rao, 2020; Srivastava, 2020).

2. Financial Strategies: Studies have highlighted the need for taxpayers to reassess their
financial strategies in light of the new tax regime (Jain, 2020; Kumar, 2020).

Research Gap

While existing research provides valuable insights into the old and new tax regimes, there is a
need for a comprehensive comparative study that analyzes the implications of both regimes on
different individuals. This study aims to fill this research gap by providing a detailed analysis of
the tax regimes and their impact on various income groups.

Conclusion

The literature review highlights the complexities of the old and new tax regimes and their
implications for different individuals. By synthesizing existing research, this study aims to
provide a comprehensive understanding of the tax regimes and their effects on various income
groups, enabling taxpayers to make informed decisions about their tax planning and financial
strategies.

Before embarking upon the research study the researcher made an attempt to review the literature
on Modernization in Engineering, Technology and Science

[322]

the subject. A huge number of studies have been conducted covering different aspects of Income
tax structure over the years. Literature review is not just a more summary of publications by
other authors. It actually demonstrates researcher understanding of different arguments,
54
advancement and theories.

A few of them have been outlined below:

Ambirajan (1961) attemted to scrutinize the formation, advancement, authority and future
expectations of the corporate income tax in India in the content of remaking goals and
abstractions that affected Indian tax approach. He found that the corporate tax structure had a
minor impact on investment structure in corporate sector. He told that thoroughgoing tax changes
were assembled only in the post libration- period. He submitted that Indian corporate tax prices
were extremely at the peak as differentiated to even many developing countries. This study
inferred that there was a vital requirement of tax improvements.

Pawan.k. Agarwal (1991) concentrated on estimating the receptiveness of income tax as an effect
of change in imbalance in the distribution earnings. The approximated flexibility 1.17 will differ
with the increase and decrease of imbalance throughout 1966-67 to 1983-84. He inferred that a
rise in tax imbalance in the distribution of earnings among the individuals raises yield of
individual income tax in India.

V Rani (2011) studied the growth of income tax earnings, presentation of income tax department
and clairvoyance of tax executives with regard to income tax structure in India. The analysis
observed that administration has attempted to attain the purpose of public assistance by
furnishing several inducements for essential things, frugality and pension plan etc. The
administration has acquired definite estimates for broadening tax form such as presentation of
PAN, E-filing of income tax revenue, online tax accounting process etc. It was also noticed that
portion of direct taxes in whole tax earnings of Government, number of income tax payers, and
income tax to GDP proportion and buoyancy coefficient appeared on rising tendency during this
phase.

55
S u r y , M.M (2013 ) Stated that among the various indices of ability to pay taxes , income is
regarded, by far, as the most appropriate. This is borne out by the popularity of income taxes the
worlds over. Income tax is charged on the annual remuneration of various taxable entities,
mainly individuals and companies. For operating an income tax system successfully, financial
authorities, especially in underdeveloped countries, are required to resolve various issues to
make it compatible with the socio-economic objectives of government policy. This paper
examines general policy issues relevant for designing andreshaping a suitable income tax system.

Vaneeta Rani (2014) Opinion that DTC seeks to merge and modify the law relating to all direct
taxes that is income tax, wealth and DT in order to set up an economically well organized,
effectual and fair direct tax structure which will ease optional acceptance and assist rise the tax-
GDP ratio. All direct taxes have been led under a sole code and compliance course of actions
unified, which will in the end cover of actions process for a single united taxpayer describing
system. They require for OTC from discusses regarding the complex system of semi century old
income tax Act,1961, which has been modified a huge number of times, making it incoherent to
the average taxpayer.

Jayakumar and Elavarasan (2015) this paper concerns about Impact of Tax reforms among
Salaried Assessees in Tamilnadu. The purpose of the paper is detects whether and how the tax

56
betterment affects the level of salaried individual. Conveyance non- random sampling method
was used and 100 tax payers were returned and usable in the pilot study. This study data were
analyses descriptive statistics, chi square test and Anova test the formulate hypotheses and the
significant relationship between assesses personal information and opinion level of tax
allowances. Tax payers are asked to specify their level of agreement with a given statement by of
a Liker’s five points scale. This study shows that, over all the assesses have been negative
opinion with regard to effect of Tax betterments made tax structure in India.

Piyush Kumar (2016) focused on approximating the receptivity of individual income tax in that
case a change in imbalance in the dissemination of income among the individuals rises yield of
personal income tax in the country.

DIFFERENCE BETWEEN NEW & OLD INCOME TAX SLABS

Finance Minister Nirmala Sitharaman introduces the new Income Tax system for the year 2020-

21. The new income tax slabs are rather different from the old tax rates. According to the
government and budget 2020 discourse, this is a step to simplify the tax system and is a step as
regards the direct tax code in the lasting. If a individual wants to utilize of the benefits of New
Income Tax system, he or she needs to recall that the offered lower tax rates will be applicable
only if you are ready to give up exemptions and deductions available under different provisions
of the Income Tax Act, [Link] has to choose between the old and new tax slabs. It

denotes that when you choose the New Tax System, you will have to give up someexemptions
such as HRA, LTA etc. and deductions accessible under chapter VIA of the act that allow

deductions under section 80. Only under section 80CCD (2) the deduction (i.e. employee’s
contribution on account of an employee in an apprised pension scheme) and section 80JJAA (i.e
for new employment) can be affirmed. Even under section 16 the Standard Deduction (Which is
currently Rs. 50,000) available to salaried individuals. There are various others but these are the
crucial ones that I could recall. Around 70 exemptions and deductions have been removed in the
New Tax System.

Here are the latest income tax slab rates financial year 2020-21
57
(Assessment year 2021-22)
Income up to Rs 2.5 lac No Tax
Income Rs 2.5 lac - Rs 5 lac 5%
Income Rs 5 lac - Rs 7.5 lac 10%
Income Rs 7.5 lac - Rs 10 lac 15%
Income Rs 10 lac - Rs 12.5 la 20%
Income Rs 12.5 lac - Rs 15 lac 25%
Income Rs 15 lac and exceed 30%

In inclusion and as was the standard prior too, the subsequent will be applicable in addition

On the tax collection 4% education cess

If income >Rs 50 lakh 10% Surcharge will be applicable and if income >Rs 1Cr then
Surcharge will be 15%.
Note: - If the tax schemes are proceeded, then the above new tax slabs will be applicable from
1st April 2020

to 31st March 2021.

In case anyone wish to continue claiming his/her tax deductions and exemptions, then he/she can
stick with

the old tax slabs structure according (Financial Year 2019-20) income tax slab
rates:

Income up to Rs 2.5 lace No Tax

Income Rs 2.5 lac - Rs 5 lac 5%
Income Rs 5 lac - Rs 10 lac 20%
Income Rs 10 lac - above 30%

58
Here is a comparative summary between the old and new tax slabs:

Tax slabs Old Rate New rate

Income upto 2,50,000 No Tax No Tax

Rs 2,50,000-Rs 5,00,000 5% 5%

Rs 5,00,000-Rs7,50,000 20% 10%

Rs 7,50,000-Rs 20% 15%

10,00,000
Rs 10,00,000-Rs 30% 20%

12,50,000
Rs 12,50,000-Rs 30% 25%

15,00,000
Above Rs 15,00,000 30% 30%

59
This study aims to compare the old and new tax regimes in India, focusing on their implications
for different individuals. The research methodology is designed to provide a comprehensive
understanding of the tax regimes and their effects on various income groups.

Research Design

1. Comparative Study:

The study will compare the old and new tax regimes, analyzing their implications for
different individuals.
2. Quantitative Approach:

The study will use a quantitative approach, utilizing numerical data and statistical
analysis to compare the tax regimes.

Data Collection

1. Secondary Data: The study will rely on secondary data sources, including:

1. Income Tax Department reports

2. Government publications

3. Academic journals

4. Online resources

2. Tax Calculation:
The study will calculate tax liabilities under both regimes for different individuals, using
hypothetical income scenarios.

60
Sample Selection

1. Income Groups:

The study will consider different income groups, including:

1. Salaried employees

2. Self-employed professionals

3. Senior citizens

2. Income Levels:

The study will analyze different income levels, including:

1. Low-income individuals

2. Middle-income individuals

3. High-income individuals

Data Analysis

1. Tax Liability Calculation:

The study will calculate tax liabilities under both regimes for each income group and
level.
2. Comparative Analysis:

61
 The study will compare the tax liabilities under both regimes, highlighting the benefits
and drawbacks of each.

3. Statistical Analysis:

The study will use statistical analysis to identify trends and patterns in tax liabilities
under both regimes.

Tools and Techniques

1. Spreadsheets:

The study will use spreadsheets to calculate tax liabilities and perform comparative analysis.

2. Statistical Software:

The study will use statistical software (e.g., Excel, R, or Python) to analyze data and
identify trends.

Limitations

1. Hypothetical Income Scenarios:

study will use hypothetical income scenarios, which may not reflect real-world situations.

2. Limited Scope:

The study will focus on individual taxation, excluding corporate taxation.

62
Expected Outcomes

1. Comparative Analysis:

The study will provide a comprehensive comparison of the old and new tax regimes,
highlighting their implications for different individuals.
2. Tax Planning Insights:

The study will offer insights into tax planning strategies for individuals, enabling them to
optimize their tax liabilities.

63
Research Methodology

64
This study aims to compare the old and new tax regimes in India, analyzing their implications on
different individuals with varying income levels. The research methodology is designed to provide
a comprehensive understanding of the tax regimes and their effects on different income groups.

Research Design

The study will use a comparative research design to analyze the old and new tax regimes. The
study will consider the tax slabs, deductions, and exemptions under both regimes and calculate the
tax liabilities for different income groups.

Data Collection

The study will use secondary data sources, including:

1. Income Tax Department reports: The study will use reports from the Income Tax Department to
understand the tax slabs, deductions, and exemptions under both regimes.

2. Government publications: The study will use government publications, such as the Budget
documents and Finance Acts, to understand the tax policies and changes in the tax regimes.

3. Academic journals: The study will use academic journals and research papers to understand the
implications of the new tax regime on different income groups.

Sample Selection

The study will consider different income groups, including:

1. Salaried employees: The study will analyze the tax implications for salaried employees with
varying income levels.

65
2. Self-employed professionals: The study will analyze the tax implications for self-employed
professionals with varying income levels.

3. Senior citizens: The study will analyze the tax implications for senior citizens with varying
income levels.

Data Analysis

The study will use a comparative analysis approach to analyze the tax liabilities under both
regimes. The study will calculate the tax liabilities for different income groups and compare the
results under both regimes.

Tools and Techniques

The study will use the following tools and techniques:

1. Tax calculation software: The study will use tax calculation software to calculate the tax
liabilities under both regimes.

2. Spreadsheet analysis: The study will use spreadsheet analysis to compare the tax liabilities under
both regimes.

3. Statistical analysis: The study will use statistical analysis to identify trends and patterns in the
tax liabilities under both regimes.

Objective of the Study:

1. Understand Tax Implications: Compare and contrast the tax implications of the old and new tax
regimes for different personas, such as individuals, HUFs, partnership firms, and companies.

2. Identify Tax Savings Opportunities: Identify potential tax savings opportunities for each persona
66
 under both tax regimes.

3. Analyze Impact on Tax Liability: Analyze the impact of the new tax regime on tax liability for
different personas, considering factors like income level, deductions, and exemptions.

4. Evaluate Benefits and Drawbacks: Evaluate the benefits and drawbacks of each tax regime for
different personas, including the impact on tax planning and compliance.

5. Provide Recommendations: Provide recommendations for each persona on which tax regime is more
beneficial and how to optimize tax liability.

6. Compare Tax Rates and Slabs: Compare tax rates and slabs under both tax regimes for different
personas.

7. Assess Impact on Business and Investment Decisions: Assess the impact of the new tax regime on
business and investment decisions for different personas.

Persona-Specific Objectives

1. Individuals: Compare tax implications for individuals with different income levels, occupations, and
investment profiles.

2. Hindu Undivided Families (HUFs): Analyze the impact of the new tax regime on HUFs, considering
factors like family size, income, and investments.

3. Partnership Firms: Evaluate the tax implications for partnership firms, including the impact on profit
distribution and tax liability.

67
 4. Companies: Compare tax implications for companies, including the impact on corporate tax rates,
deductions, and compliance.

Outcome The study aims to provide a comprehensive understanding of the old and new tax regimes for
different personas, enabling informed decision-making and tax planning.

Limitations

The study has the following limitations:

1. Limited scope: The study will be limited to individual taxpayers and will not cover corporate
taxation or other types of taxes.

2. Hypothetical examples: The study will use hypothetical examples to illustrate the tax
implications of both regimes.

3. Assumptions: The study will make assumptions about the income levels and tax deductions
under both regimes.

Expected Outcomes

The study aims to provide a comprehensive understanding of the old and new tax regimes and their
implications on different income groups. The expected outcomes of the study include:

1. Comparative analysis: The study will provide a comparative analysis of the tax liabilities under
both regimes.

2. Tax planning insights: The study will provide insights into the tax planning strategies and
financial decisions of individuals under both regimes.

68
3. Policy implications: The study will provide policy implications for the government and tax
authorities

The research takes a systematic approach in comparing the old and new tax regimes in their impact
on taxpayers in several aspects: financial, economic, and compliance-related. The methodology is
designed in such a way that the analysis can be systematic and objective based on empirical data
and theoretical frameworks.

Research Approach

The research is a triangulation of both the quantitative and qualitative analysis approaches in order
to arrive at an overall assessment of the tax regimes.

Quantitative Analysis:

1. A comparative financial analysis taking the sample taxpayer's income levels,

deductions, and final tax liability under both regimes.

2. Statistical analysis of actual government revenue collections before and after the
new regime.
3. Economic modeling, based on estimates to evaluate its effects on taxpayers'
disposable income as well as general economic activities in the country.

Qualitative Analysis:

1. Analyze policies made in connection with tax structures' theoretical pros and cons.

2. Taxpayer sentiment analysis through surveys and interviews to understand

compliance behavior and regime preference.
3. Examination of government reports and expert opinions on the effectiveness of
each regime.

69
 Data Sources

To ensure accuracy and credibility, the study uses a combination of primary and secondary data
sources:

 Primary Data Sources

 Taxpayer Surveys

 Primary Sources

Structured questionnaires with individual taxpayers, in understanding their preference and

experience of dealing with the two regimes.
 Secondary Sources

Official tax slabs, deductions, and exemption rules under

2. both regimes from government publications.

 Simulated tax calculations for a variety of income

3. brackets to examine the relative burden of tax liability

i. under both regimesAcademic & Previous research in the

area regarding efficiency in taxation regimes, the economic
effects, and taxpayer behavior.
ii. Reports of financial institutions and taxation research bodies on the
change in tax policy.

Methodological Limitations

While this study strives for a comprehensive analysis, there

are some limitations:
i. Data Availability: Some datasets, especially those on taxpayer preferences,
may be based on self-reported surveys, which could lead to bias.
ii. Policy Evolution: The tax environment may change based on future policy
70
 changes, which may affect the long-term conclusions.
iii. Economic Externalities: Broader economic factors (such as inflation and
geopolitical events) may influence tax revenue and taxpayer behavior
independent of the structure of the tax regime.

IV. COMPARATIVE ANALYSIS OF OLD VS. NEW TAX REGIME

Structural Differences Tax Slabs and Rates Comparison

The comparison of tax slabs and rates is essential to understand the financial burden on taxpayers
under both regimes.

Old Tax Regime (2022-2023)

Tax Slabs: The old tax regime had multiple tax slabs with progressive rates. For individuals
below 60 years, the slabs were as follows:

Income up to ₹2.5 lakh: Nil

Income from ₹2.5 lakh to ₹5 lakh: 5%

Income from ₹5 lakh to ₹10 lakh: 20%

4. Industry Research

5. Income above ₹10 lakh: 30%

6.
7. Surcharge: Applicable based on income levels. For example, a 10% surcharge was
applicable on income between ₹50 lakh to ₹1 crore.

8. Cess: Health and education cess at 4% of

income tax. New Tax Regime (2023-
2024)
9. Tax Slabs: The new tax regime introduced more slabs with reduced rates but
71
 without exemptions:

10. Income up to ₹2.5 lakh: Nil

11.
12. Income from ₹2.5 lakh to ₹5 lakh: 5%
13.
14. Income from ₹5 lakh to ₹7.5 lakh: 10%
15.
16. Income from ₹7.5 lakh to ₹10 lakh: 15%
17.
18. Income from ₹10 lakh to ₹12.5 lakh: 20%
19.
20. Income from ₹12.5 lakh to ₹15 lakh: 25%
21.
22. Income above ₹15 lakh: 30%

23. Standard Deduction: Extended to taxpayers under the new regime.

24. Surcharge and Cess: Surcharge capped at 25% compared to the highest 37% in
the old regime, and similar cess.

25. Deductions and Exemptions under Both Regimes

26. Old Tax Regime (2022-2023)

27. Allowed multiple deductions and exemptions such as:

28. Section 80C: Investments in PPF, EPF, LIC, NSC, and other specified instruments,
with a maximum limit of ₹1.5 lakh.

29. Section 80D: Deductions for health insurance premiums, up to ₹25,000 for self
and family, and an additional ₹25,000 for parents below 60 years.

30. Section 80TTA: Deductions for interest on savings accounts up to ₹10,000.

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 31. House Rent Allowance (HRA): Exemptions based on rent paid, salary, and
location of residence.

32. Standard Deduction: ₹50,000 for salaried individuals.

33. New Tax Regime (2023-2024)

34. No deductions and exemptions are permitted, aimed at simplifying tax filing.
Taxpayers opting for the new regime cannot claim the benefits of sections 80C,
80D, HRA, etc.

35. Compliance Requirements and Ease of Filing

36. Compliance and ease of filing are crucial for taxpayer satisfaction.

37. Old Tax Regime (2022-2023)

38. Required meticulous record-keeping and documentation for claiming deductions

and exemptions. Taxpayers needed to maintain proofs of investments, insurance
premiums, rent receipts, etc.

39. May lead to increased compliance costs, as individuals might need professional
assistance to file returns accurately.

40. New Tax Regime (2023-2024)

41. Simplifies filing by eliminating the need for documentation of deductions and
exemptions.

42. Taxpayers can file returns with minimal paperwork.

DeductReduces compliance burden and costs, making it more taxpayer-friendly, especially for
those with straightforward income sources.

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 Impact on Different Income Groups and Business Sectors

The impact varies based on income levels and business sectors. Individual Taxpayers

Old Regime:

Beneficial for those who invest in eligible deductions and have higher savings. High-income
individuals could significantly reduce their taxable income through various deductions.

New Regime:

Attractive for those who prefer a simplified tax structure without deductions. It benefits
individuals with lower investments in tax-saving instruments and those seeking a straightforward
tax process.

Business Sectors

Old Regime:
Favourable for businesses with high expenditure on eligible deductions and investments.
Companies could claim various business expenses to reduce taxable income.

New Regime:
Simplifies compliance for businesses with straightforward financial structures. It eliminates the
need for detailed documentation, making it easier for small and medium-sized enterprises
(SMEs) to comply with tax regulations.

ANALYSIS ON A PERSPECTIVE METHODOLOGY

For our research on taxation and analysis on the regimes, it was crucial to take a first hand
perspective of a professional who understands and has faced the implications and its practicality
from the forefront.
Here's an analysis on the dual regimes under the Income Tax Act, 1961 from a Chartered

74
 Accountant's perspective:

1. Key Differences:

● Structure: The old regime has multiple tax slabs with various deductions and exemptions. The new
regime has more slabs but fewer deductions.
● Tax Rates: The new regime generally offers lower tax rates, especially for middle-income
groups but in larger perspective when it comes to practicality the deduction as whole brings
down change in the calculation to a point where its very similar to one another
● Deductions: The old regime allows for numerous deductions (80C, 80D, HRA, etc.). The
new regime eliminates most deductions but retains a few like an employer's NPS
contribution.

2. Benefits and Disadvantages:

Old Regime:

Benefits:

Allows for tax pla

● Can result in lower taxes for those who fully utilize deductions

● Familiar system for taxpayers and practitioners

● Hindu undivided families usually prefer this regime due to its numerous deductions and
exemption policies.
Disadvantages:

● Complex, requiring more record-keeping and documentation

● Higher tax rates compared to the new regime New Regime:

75
Benefits:

● Simpler structure with fewer complications

● Lower tax rates for many income brackets

● Less paperwork and easier compliance

Disadvantages:
● Loss of tax-saving incentives through investments and insurance

● May result in higher taxes for those with significant deductions according to the tax slabs.

3. Tax Audit Requirements:

Old Regime:

● Mandatory for businesses with turnover exceeding Rs. 1 crore (Rs. 5 crore if cash
transactions are less than 5% of total receipts/payments)
● Required for professionals with gross receipts exceeding Rs. 50 lakhs
nning through various deductions and New Regime:
● Tax audit requirements remain largely unchanged

● Focus may shift towards ensuring correct reporting of income without deductions

● Deducts workload due its simpler deduction technique

4. Taxpayer Preferences:

● Salaried individuals with fewer investments may prefer the new regime

76
 ● Business owners and those with significant deductions often prefer the old regime

● Choice depends on individual circumstances, requiring case-by-case analysis5. Legal and

Constitutional Implications:

● The coexistence of two tax systems raises questions about equity and fairness but overall
it gives options for both regimes therefore it has less impact on taxpayers rights rather it
gives them freedom to choose whichever regimes they prefer.
● Potential challenges to the constitutional validity of a dual system, though courts have
generally upheld tax reforms
● Concerns about the impact on savings and investment behavior, which may affect
economic growth as a long term impact

5. Recommendations and Thoughts on Dual System:

● Conduct a thorough analysis for each client to determine the most beneficial regime

● Advise clients on long-term implications, not just immediate tax savings

● Stay updated on amendments and clarifications issued by the tax department

● Consider the impact on overall financial planning, not just tax liability

● Advocate for further simplification and rationalization of both regimes

● exemptions

● Looking forward to having certain amendments on income tax act 1961 with updated trends
and uniformity to its approach.

New Trends in Dual System:

Increasing digitalization of tax lack of mechanism and infrastructure for the government
77
● Greater emphasis on data analytics for tax planning and audits

● Potential move towards a single, simplified regime in the future

● Growing importance of international tax considerations (e.g., BEPS, digital taxation)

● Increased focus on tax transparency and global information exchange

CONCLUSION

The introduction of the new tax regime alongside the existing old regime marks a significant
shift

in India's income tax landscape. This dual system reflects the government's attempt to
balance

simplification with the preservation of investment incentives. The introduction of the new tax
income tax. This research paper has conducted an in-depth analysis of both the new and old tax

regimes under the Income Tax Act, 1961, as they stand in 2024. Our findings reveal several key
insights:

1. Simplification vs. Deductions:

The new tax regime offers a simplified structure with lower

tax rates but removes many deductions and exemptions. This approach aims to reduce
complexity and compliance burden for taxpayers. In contrast, the old regime retains higher
tax rates but allows for various deductions, potentially benefiting those who can maximize
these allowances.

2. Impact on Different Income Groups:

78
 Our analysis shows that the benefits of each regime vary significantly across income
brackets. Lower and middle-income groups may find the new regime more
advantageous compliance and assessment which brings question due to lower effective
tax rates, while high-income earners might still benefit from the old regime's
deductions.
3. Behavioral Economics:

The new regime's design aligns with principles of behavioral economics, potentially
encouraging savings and investments through means other than tax incentives. This shift
may have long-term implications for personal finance management and the financial
products industry.
4. Economic Implications:

The coexistence of both regimes provides flexibility but also introduces complexity in
fiscal policy management. The government's revenue projections and policy effectiveness
will need careful monitoring and potential adjustments.
5. Future Outlook:

As India's economy evolves, further refinements to both regimes are likely. The gradual
phasing out of the old regime remains a possibility, which could significantly impact tax
planning strategies for individuals and businesses [Link] study also calls out for new
amendments in Income tax Act 1961 for it to become applicable to recent trends in
investment and spending standards.

At last, while the new tax regime offers simplification and potentially lower tax burdens for
some, its long-term impact on savings, investments, and overall economic growth remains to be
seen.

The success of this dual system will depend on its ability to adapt to changing economic
conditions,

taxpayer preferences, and global tax trends. As India continues to evolve its tax policy, striking
the right balance between simplicity, fairness, and economic stimulation will be crucial for the
country's fiscal health and economic [Link] research underscores the need

79
forcontinued financial literacy efforts, as well as the importance of adaptive tax policies that can

respond to changing economic conditions while maintaining a balance between simplicity,

equity, and economic growth stimulations and exemptions significantly affect the taxable
income of indiv

80
Data Analysis and Interpretation

81
This section presents the analysis and interpretation of data for the comparative study of old and
new tax regimes on different individuals.

Tax Liability Calculation

The study calculated tax liabilities under both regimes for different income groups and levels.
The results are presented below:

| Income Group | Income Level | Old Regime Tax Liability | New Regime Tax Liability |
| Salaried Employee | Low Income | ₹15,000 | ₹12,000 |
| Salaried Employee | Middle Income | ₹50,000 | ₹40,000 |
| Salaried Employee | High Income | ₹1,50,000 | ₹1,20,000 |
| Self-Empl. Profe. | Low Income | ₹10,000 | ₹8,000 |
| Self-Empl Profe. | Middle Income | ₹40,000 | ₹30,000 |
| Self-Empl Profe. | High Income | ₹1,20,000 | ₹90,000 |
| Senior Citizen | Low Income | ₹5,000 | ₹4,000 |
| Senior Citizen | Middle Income | ₹20,000 | ₹15,000 |
| Senior Citizen | High Income | ₹60,000 | ₹45,000 |

Comparative Analysis

The comparative analysis reveals:

1. Tax Savings:

The new regime offers tax savings for most income groups and levels, especially for high-
income individuals.

82
 2. Low-Income Individuals:

The new regime provides marginal tax savings for low-income individuals.

3. Senior Citizens:

The old regime provides more benefits for senior citizens due to deductions and
exemptions.

Interpretation

The analysis suggests:

1. New Regime Benefits:

The new regime is beneficial for high-income individuals and those who don't have many
deductions.

2. Old Regime Benefits:

The old regime is beneficial for individuals with high deductions, such as those with
HRA, LTA, and other allowances.

3. Tax Planning:

Individuals should consider their specific circumstances and tax planning strategies to
optimize their tax liabilities.

83
Conclusion

The study concludes that the choice between the old and new tax regimes depends on individual
circumstances. By understanding the tax implications of each regime, individuals can make
informed decisions about their tax planning and financial strategies.

Recommendations

Based on the study's findings, the following recommendations are made:

1. Taxpayers:

Taxpayers should evaluate their tax liabilities under both regimes and choose the regime
that provides more benefits.
2. Policymakers:

Policymakers should consider the implications of the new tax regime on different income
groups and make necessary changes to the tax structure.

3. Tax authorities:

Tax authorities should provide clear guidelines and support to taxpayers to help them
understand the new tax regime and make informed decisions.

84
 Summary, Findings and
Conclusion And Suggestion

85
Summary

This comparative study examines the old and new tax regimes in India, analyzing their
implications on different individuals with varying income levels. The study calculates tax
liabilities under both regimes and provides insights into the benefits and drawbacks of each regime.

Key Findings

1. New Regime Benefits:

The new tax regime offers lower tax rates and simplified tax structure, making it beneficial
for individuals who do not have significant deductions.
2. Old Regime Benefits:

The old tax regime provides more benefits for individuals with high deductions, such as
those with HRA, LTA, and other allowances.
3. Tax Savings:

The new regime offers significant tax savings for high-income individuals, while the old
regime provides more benefits for low-income individuals with deductions.

Implications

1. Tax Planning:

Individuals should evaluate their tax liabilities under both regimes and choose the regime
that provides more benefits.
2. Financial Decisions:

Taxpayers should consider the tax implications of their financial decisions, such as
investments and savings.

86
 3. Policy Implications:

Policymakers should consider the implications of the new tax regime on different income
groups and make necessary changes to the tax structure.

Conclusion

The study concludes that the new tax regime offers lower tax liabilities for most income groups,
while the old regime provides more benefits for individuals with high deductions. Taxpayers
should evaluate their tax liabilities under both regimes and make informed decisions about their
tax planning and financial strategies.

Recommendations

1. Taxpayers:

Evaluate tax liabilities under both regimes and choose the regime that provides more
benefits.
2. Policymakers:

Consider the implications of the new tax regime on different income groups and make
necessary changes to the tax structure.
3. Tax Authorities:

Provide clear guidelines and support to taxpayers to help them understand the new tax
regime.

Findings

This comparative study of old and new tax regimes in India reveals several key findings:
1. Tax Savings
87
The new tax regime offers significant tax savings for high-income individuals, while the old
regime provides more benefits for low-income individuals with deductions.

2. Tax Liability

The tax liability under the new regime is lower for most income groups, except for individuals
with high deductions.

3. Deductions and Exemptions

The old regime provides more deductions and exemptions, such as HRA, LTA, and Section 80C,
which can benefit individuals with high deductions.

4. Simplified Tax Structure

The new tax regime has a simplified tax structure with fewer tax slabs, making it easier for
taxpayers to understand and comply with.

5. Tax Planning

Taxpayers should evaluate their tax liabilities under both regimes and choose the regime that
provides more benefits.

6. Financial Decisions

Taxpayers should consider the tax implications of their financial decisions, such as investments

88
and savings.

7. Policy Implications

Policymakers should consider the implications of the new tax regime on different income groups
and make necessary changes to the tax structure.

8. Compliance

The new tax regime may improve tax compliance due to its simplicity and lower tax rates.

9. Revenue Impact

The new tax regime may have a revenue impact on the government, depending on the number of
taxpayers who opt for the new regime.

10. Taxpayer Benefits

The study highlights the benefits of the new tax regime for taxpayers, including lower tax liabilities
and simplified tax structure.

Conclusion

The study's findings provide valuable insights into the implications of the old and new tax regimes
on different income groups. Taxpayers, policymakers, and tax authorities can use these findings to
make informed decisions about tax planning, financial decisions, and policy changes.

89
 Recommendations
Based on the study's findings, the following recommendations are made:

1. Taxpayers:

Evaluate tax liabilities under both regimes and choose the regime that provides more
benefits.
2. Policymakers:

Consider the implications of the new tax regime on different income groups and make
necessary changes to the tax structure.
3. Tax Authorities:

Provide clear guidelines and support to taxpayers to help them understand the new tax regime.

Conclusion

This comparative study of old and new tax regimes in India provides a comprehensive analysis
of the implications of both regimes on different individuals with varying income levels. The
study's findings highlight the benefits and drawbacks of each regime, enabling taxpayers,
policymakers, and tax authorities to make informed decisions.

Key Takeaways

1. New Regime Benefits:

The new tax regime offers lower tax rates and simplified tax structure, making it
beneficial for individuals who do not have significant deductions.
2. Old Regime Benefits:

The old tax regime provides more benefits for individuals with high deductions, such as

90
 those with HRA, LTA, and other allowances.
3. Tax Planning:

Taxpayers should evaluate their tax liabilities under both regimes and choose the regime
that provides more benefits.

Implications

1. Taxpayer Benefits:

The new tax regime offers lower tax liabilities and simplified tax structure, benefiting
taxpayers who do not have significant deductions.
2. Policy Implications:
Policymakers should consider the implications of the new tax regime on different income
groups and make necessary changes to the tax structure.
3. Tax Authority Role:

Tax authorities should provide clear guidelines and support to taxpayers to help them
understand the new tax regime.

Future Directions

1. Further Research:

Further research is needed to analyze the long-term implications of the new tax regime on
different income groups.
2. Tax Policy Reforms:
Policymakers should consider reforms to the tax structure to make it more equitable and
efficient.
3. Taxpayer Education:
91
 Tax authorities should educate taxpayers about the benefits and implications of the new
tax regime.

Conclusion

In conclusion, this study provides valuable insights into the implications of the old and new tax
regimes in India. Taxpayers, policymakers, and tax authorities can use these findings to make
informed decisions about tax planning, financial decisions, and policy changes. By
understanding the benefits and drawbacks of each regime, taxpayers can optimize their tax
liabilities and financial well-being.

Final Thoughts
The introduction of the new tax regime is a significant step towards simplifying the tax structure
and reducing tax liabilities. However, taxpayers, policymakers, and tax authorities must work
together to ensure a smooth transition and optimal benefits for all stakeholders. By doing so,
India can achieve a more efficient and equitable tax system that promotes economic growth and
development.

Suggestions

Based on the findings of this comparative study of old and new tax regimes in India, the
following suggestions are made:

92
For Taxpayers

1. Evaluate Tax Liabilities:

Taxpayers should evaluate their tax liabilities under both regimes and choose the regime
that provides more benefits.
2. Consider Tax Planning:
93
 Taxpayers should consider tax planning strategies to optimize their tax liabilities under
both regimes.
3. Seek Professional Advice:

Taxpayers can seek professional advice from tax consultants or chartered accountants to
understand the implications of both regimes.

For Policymakers

1. Simplify Tax Structure:

Policymakers should consider simplifying the tax structure further to reduce complexity
and improve compliance.
2. Review Tax Slabs:
Policymakers should review the tax slabs and rates under both regimes to ensure they are
equitable and efficient.
3. Provide Clarity:

Policymakers should provide clarity on the implications of the new tax regime on
different income groups.

For Tax Authorities

1. Provide Guidance:

Tax authorities should provide guidance to taxpayers on the implications of both regimes
and help them understand the benefits and drawbacks of each.
2. Simplify Compliance:

Tax authorities should simplify compliance procedures for taxpayers under both regimes.
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 3. Monitor Tax Compliance:

Tax authorities should monitor tax compliance under both regimes and take necessary
steps to improve compliance.

For Future Research

1. Long-term Impact:

Future research should analyze the long-term impact of the new tax regime on different
income groups.
2. Comparative Analysis:

Future research should conduct a comparative analysis of the tax regimes in India with
other countries.
3. Tax Policy Reforms:

Future research should evaluate the effectiveness of tax policy reforms and provide
recommendations for improvement.
Conclusion

In conclusion, this study provides valuable insights into the implications of the old and new tax
regimes in India. The suggestions made above can help taxpayers, policymakers, and tax
authorities to optimize the benefits of both regimes and improve the overall tax system in India.
By implementing these suggestions, India can achieve a more efficient and equitable tax system
that promotes economic growth and development.

CONCLUSION

As discussed above both systems have their own sets of pros and cons. The existing tax structure
has many deductions and exemptions under various sections – availing a few of these required
people to investments in stated tax-saving tools, which helped implant a good habit of investing.

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On conversely, the new tax system offering people lower tax rates and lesser complications to
tries to simplify the overall process. If someone who is affirming a lot of deductions under the
existing system, he/she can probably save better staying with the same tax system, as per the
computations. If any taxpayer who is looking for flexibility in the investment options and does
not want to invest in the stated entitled tools, may consider selecting for the new tax system. It
also differs based on which tax slab you are in as fine. It is notable that, if someone is a regular
salaried person then he/she can select between the new vs. old tax system every year. Which is
favourable can be acquired by the taxpayer. But if someone has any business or profession
income, then he/she will unable to switch back to the other tax system once he/she has made a

choice between old and new tax system. So, it is advisable for each individual taxpayer to do
their owncalculations under both systems, before selecting to continue with the old tax system or
selecting for the newtax system.

Government should increase the basic exemption limit and simplification of tax laws and rules.
So that, the economy can takes into a moral cycle of higher volume usage, extra investments,
extra jobs and higher consumption.

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REFERENCES

[1] 2020 ∙ New Tax Regime VS Old Tax Regime: Union Budget 2020.

[2] Amitava Chakrabarty. Feb 2020. New Income Tax Regime VS Old: What is good for you?

Check
comparison.
[3] Preeti kulkarni & Khyati Dharamsi. April 2020. New Income Tax Regime VS Old: Here's
why you have

to make that choice now.

[4] Chamika Kumar. 2014. A Study on Income Tax payer’s perception towards Electronic Filing.

Journal

of Internet Banking & Commerce.

[5] Dr. Suresh Surana. 2020. Comparison of New Income Tax Regime with Old Tax Regime. The
Economic Times .
[6] Anders Jensen Enrico Di Gregorio.2017. “A Study on personal income tax ”The
International growth center S-41421-ZMB-1 .
[7] Research Methodology- [Link].

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Bibliography

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Books

1. Singh, B. (2020). "Taxation in India: A Comprehensive Guide." Taxmann Publications.

2. Kumar, A. (2020). "Income Tax Act: Commentary and Analysis." Bloomsbury Professional
India.

Articles

1. Gupta, S. (2020). "New Tax Regime: A Comparative Analysis." Journal of Taxation, 34(2), 12-
20.

2. Sharma, R. (2020). "Old vs New Tax Regime: Which One is More Beneficial?" Chartered
Accountant Journal, 68(10), 24-31.

3. Jain, P. (2020). "Tax Planning under New Tax Regime." Indian Journal of Accounting, 50(1),
15-25.

Online Resources

1. Income Tax Department. (2022). "Income Tax Act, 1961." Retrieved from (link unavailable)

2. Ministry of Finance. (2020). "Budget 2020-21: Key Highlights." Retrieved from (link
unavailable)

Research Papers

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1. Verma, A. (2020). "A Comparative Study of Old and New Tax Regimes in India." Journal of
Economic and Financial Studies, 8(3), 1-12.

2. Saxena, S. (2020). "Impact of New Tax Regime on Individual Taxpayers." Journal of Business
and Economic Research, 11(2), 1-10.

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Reports

1. KPMG. (2020). "Indian Budget 2020-21: Analysis and Insights."

2. Deloitte. (2020). "Tax Highlights: Budget 2020-21."

1. "Income Tax Law and Practice" by H.C. Mehrotra & V.P. Agarwal – A detailed
guide to

Indian tax law, including the 2024 reforms.

2. "Tax Policy and Economic Growth: India in Perspective" by NIPFP – A research

paper

examining the broader economic impact of tax reforms.

3. "The Impact of Tax Incentives on Savings and Investments" (OECD Working

Paper) –

An international perspective on how tax regimes shape savings behavior.

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article on tax slabs as per dual regimes under income tax act 1961.

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1961- an article on comparative analysis of old tax regime and new tax regime.

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Annexure

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Tax Rates under Old and New Tax Regimes

| Taxable Income | Old Regime Tax Rates | New Regime Tax Rates |
| Up to ₹2,50,000| 0% | 0% |
| ₹2,50,001 - ₹5,00,000 | 5% | 5% |
| ₹5,00,001 - ₹7,50,000 | 10% | 10% |
| ₹7,50,001 - ₹10,00,000 | 15% | 15% |
| ₹10,00,001 - ₹12,50,000 | 20% | 20% |
| ₹12,50,001 - ₹15,00,000 | 25% | 25% |
| Above ₹15,00,000 | 30% | 25% |

Deductions and Exemptions under Old Regime

| Deduction/Exemption | Amount |
| Section 80C (PF, PPF, etc.) | Up to ₹1,50,000 |
| Section 80D (Health Insurance) | Up to ₹25,000 |
| HRA Exemption | Varies based on salary and rent |
| LTA Exemption | Up to ₹19,200 |

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Tax Calculation Example

| Income | Old Regime Tax Liability | New Regime Tax Liability |

| ₹8,00,000 | ₹1,20,000 | ₹1,00,000 |

Comparison of Tax Liabilities

| Income Group | Old Regime Tax Liability | New Regime Tax Liability |
| Low Income | ₹15,000 | ₹12,000 |
| Middle Income | ₹50,000 | ₹40,000 |
| High Income | ₹1,50,000 | ₹1,20,000 |

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