People with an annual income of up to Rs 2.5 lakh are exempt from paying income tax.

In the old tax regime, there are seven tax slabs, with the liability going from NIL to 30 per cent of the income.

Here are the income tax slabs under old tax regime:

However, experts feel that the old tax regime that comes with exemptions on certain investments and expenditures will remain attractive for taxpayers who pay house rent or have a home loan. It is also proposed to allow these two deductions under the new regime. Standard deduction of Rs 50,000 to salaried individuals, and deduction from family pension up to Rs 15,000, is currently allowed only under the old regime. Taxpayers with an annual income of up to Rs 7 lakh will save Rs 33,800 in taxes after the finance minister increased the rebate under the new income tax regime. The rebate for the resident individual under the new regime has been raised to Rs 7 lakh.

While presenting the Union Budget on February 1, finance minister Nirmala Sitharaman announced changes in the new regime of personal income tax. In India, income tax is a tax levied by the central government on the income of individuals, Hindu Undivided Families (HUFs), companies, firms, associations of persons, body of individuals, etc.

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