ITR Filing FY25: ₹13 Lakh CTC – How Much Tax Will You Pay Under Old vs New Tax Regime?

Choosing between the old and new tax regimes can make a significant difference to your take-home salary. If your Cost to Company (CTC) is ₹13 lakh per annum, here’s a breakdown of how much income tax you'll pay under each system in Financial Year 2024–25 (Assessment Year 2025–26)—updated with the latest Budget 2024 changes.

What’s the Difference Between Old and New Tax Regime?

1. Old Tax Regime

• Allows deductions and exemptions like:
• Standard deduction (₹50,000)
• HRA, 80C (ELSS, PF, LIC, etc.), 80D (medical insurance), home loan interest, etc.
• Best suited for taxpayers who invest or claim multiple deductions.

2. New Tax Regime

• Lower tax rates.
• Standard deduction increased to ₹75,000 (from ₹50,000) for salaried individuals with income up to ₹15.5 lakh.
• No major exemptions (except employer NPS and standard deduction).
• Simpler compliance.

CTC Breakdown: ₹13 Lakh per Annum

Note: This CTC breakup is a representative estimate based on typical salary trends. Actual components may vary depending on employer policies, location, role, and benefits structure.

New Tax Regime (FY 2024–25)

1. Eligible Deductions:

• Standard Deduction: ₹75,000 (as per Budget 2024)
• No 80C, HRA, 80D, etc.
• Employer NPS Contribution: ₹52,000

2. Taxable Income:

₹13,00,000 – ₹1,27,000 = ₹11,73,000

3. Tax Slabs and Calculation:

This tax estimate assumes standard deduction of ₹75,000 and employer NPS contribution of ₹52,000 (10% of basic). Actual tax payable will vary based on your specific NPS contribution eligibility and other income components.

Old Tax Regime

1. Deductions Assumed:

• Standard Deduction: ₹50,000
• Section 80C: ₹1,50,000 (ELSS, PPF, LIC, etc.)
• Section 80D: ₹25,000 (health insurance)
• HRA Exemption: ₹1,00,000 (assumed)

2. Taxable Income:

₹13,00,000 – (₹50K + ₹1.5L + ₹25K + ₹1L) = ₹9,75,000

Tax Slabs and Calculation:

Note: Other deductions like 80E, 80G, home loan interest, and NPS (80CCD) are not considered here. Only common claims applicable to most salaried individuals are assumed.

Old vs New Regime: Tax Comparison

Which Tax Regime Should You Choose?

1. Choose Old Regime if you:

• Invest in tax-saving instruments (PF, ELSS, PPF – under Section 80C)
• Pay rent and claim HRA exemption
• Pay health insurance premiums (Section 80D)
• Have an active home loan (interest deduction under Section 24(b))
• Pay education loan interest (Section 80E)
• Claim children's education allowance
• Contribute to NPS (Section 80CCD(1B)) for extra ₹50,000 deduction
• Make donations (Section 80G) or claim disability/medical condition benefits (Sections 80U/80DD/80DDB)

2. Choose New Regime if you:

• Don’t claim many deductions or exemptions
• Don’t have major rent, insurance, or investment-related expenses
• Prefer simplicity and ease of filing with flat slab rates
• Want to avoid tracking eligible deductions/documentation

Conclusion

Choosing between the old and new tax regimes depends on your financial habits. The old regime suits those claiming multiple deductions like 80C, HRA, or home loan. The new regime offers lower rates and fewer deductions ideal for simpler finances. For a ₹13 lakh CTC, the new regime may offer lower tax outgo in some cases. However, your actual benefit depends on how much you invest or claim. Always compare both regimes before filing to make the best choice for your situation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.