{"id":28901,"date":"2025-03-09T01:10:50","date_gmt":"2025-03-08T19:40:50","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=28901"},"modified":"2025-03-27T16:18:23","modified_gmt":"2025-03-27T10:48:23","slug":"differences-in-surcharge-rates-between-new-old-tax-regime","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/differences-in-surcharge-rates-between-new-old-tax-regime\/","title":{"rendered":"Differences in surcharge rates between New &#038; Old Tax Regime"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dd5ba0c639c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dd5ba0c639c\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/differences-in-surcharge-rates-between-new-old-tax-regime\/#Differences_in_surcharge_rates_between_New_Tax_Regime_Old_Tax_Regime\" title=\"Differences in surcharge rates between New Tax Regime &amp; Old Tax Regime\">Differences in surcharge rates between New Tax Regime &amp; Old Tax Regime<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/differences-in-surcharge-rates-between-new-old-tax-regime\/#Key_Differences_in_Surcharge_Rates\" title=\"Key Differences in Surcharge Rates:\">Key Differences in Surcharge Rates:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/differences-in-surcharge-rates-between-new-old-tax-regime\/#Major_Differences_in_Surcharge_Rates\" title=\"Major Differences in Surcharge Rates \">Major Differences in Surcharge Rates <\/a><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-28421\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/PPT-.jpg\" alt=\"Principal Purpose Test\" width=\"941\" height=\"549\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/PPT-.jpg 715w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/PPT--300x175.jpg 300w\" sizes=\"(max-width: 941px) 100vw, 941px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Differences_in_surcharge_rates_between_New_Tax_Regime_Old_Tax_Regime\"><\/span><span style=\"color: #000080;\"><strong><em>Differences in surcharge rates between New Tax Regime &amp; Old Tax Regime<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><em>The new regime provides significant tax savings for high-income taxpayers, especially those earning above INR 5 crore or with capital gains\/dividend income. Taxpayers should still evaluate whether the lower surcharge outweighs the loss of deductions before opting for the new regime. <\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Key_Differences_in_Surcharge_Rates\"><\/span><span style=\"color: #000080;\"><strong><em>Key Differences in Surcharge Rates:<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong><em><span style=\"color: #000080;\">New Tax Regime (Section 115BAC(1A))<\/span>: <\/em><\/strong><em>Surcharge applies to income exceeding \u20b950 lakh as follows:<\/em><\/p>\n<table style=\"height: 310px;\" width=\"913\">\n<thead>\n<tr>\n<td><strong><em>Total Income<\/em><\/strong><\/td>\n<td><strong><em>Surcharge Rate<\/em><\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><em>\u20b950 lakh &#8211; \u20b91 crore<\/em><\/td>\n<td><strong><em>10%<\/em><\/strong><\/td>\n<\/tr>\n<tr>\n<td><em>\u20b91 crore &#8211; \u20b92 crore<\/em><\/td>\n<td><strong><em>15%<\/em><\/strong><\/td>\n<\/tr>\n<tr>\n<td><em>\u20b92 crore+ (Excluding capital gains &amp; dividends)<\/em><\/td>\n<td><strong><em>25%<\/em><\/strong><\/td>\n<\/tr>\n<tr>\n<td><em>\u20b92 crore+ (Including capital gains &amp; dividends under Sections 111A, 112, 112A)<\/em><\/td>\n<td><strong><em>15%<\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em>Maximum surcharge is capped at 25%. For capital gains &amp; dividend income, surcharge is capped at 15%. AOPs with only company members under 115BAC(1A) are subject to a maximum surcharge of 15%.<\/em><\/p>\n<p><span style=\"color: #000080;\"><strong><em>Old Tax Regime : <\/em><\/strong><\/span><em>Surcharge applies as follows:<\/em><\/p>\n<table style=\"height: 306px;\" width=\"907\">\n<thead>\n<tr>\n<td><em>Total Income<\/em><\/td>\n<td><em>Surcharge Rate<\/em><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><em>\u20b950 lakh &#8211; \u20b91 crore<\/em><\/td>\n<td><strong><em>10%<\/em><\/strong><\/td>\n<\/tr>\n<tr>\n<td><em>\u20b91 crore &#8211; \u20b92 crore<\/em><\/td>\n<td><strong><em>15%<\/em><\/strong><\/td>\n<\/tr>\n<tr>\n<td><em>\u20b92 crore &#8211; \u20b95 crore<\/em><\/td>\n<td><strong><em>25%<\/em><\/strong><\/td>\n<\/tr>\n<tr>\n<td><em>\u20b95 crore+<\/em><\/td>\n<td><strong><em>37%<\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em>The highest surcharge rate of 37% applies only in the old regime. No cap on surcharge for capital gains and dividends (except the general limits above).<\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Major_Differences_in_Surcharge_Rates\"><\/span><span style=\"color: #000080;\"><strong><em>Major Differences in Surcharge Rates <\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><em>key differences in surcharge rates between the New Tax Regime (Section 115BAC) and the Old Tax Regime significantly impact high-income taxpayers:<\/em><\/p>\n<table style=\"height: 327px;\" width=\"904\">\n<thead>\n<tr>\n<td width=\"174\"><strong><em>Income Slab<\/em><\/strong><\/td>\n<td width=\"202\"><strong><em>Surcharge (Old Regime)<\/em><\/strong><\/td>\n<td width=\"181\"><strong><em>Surcharge (New Regime &#8211; 115BAC(1A))<\/em><\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td width=\"174\"><em>\u20b950 lakh &#8211; \u20b91 crore<\/em><\/td>\n<td width=\"202\"><em>10%<\/em><\/td>\n<td width=\"181\"><em>10%<\/em><\/td>\n<\/tr>\n<tr>\n<td width=\"174\"><em>\u20b91 crore &#8211; \u20b92 crore<\/em><\/td>\n<td width=\"202\"><em>15%<\/em><\/td>\n<td width=\"181\"><em>15%<\/em><\/td>\n<\/tr>\n<tr>\n<td width=\"174\"><em>\u20b92 crore &#8211; \u20b95 crore<\/em><\/td>\n<td width=\"202\"><em>25%<\/em><\/td>\n<td width=\"181\"><em>25%<\/em><\/td>\n<\/tr>\n<tr>\n<td width=\"174\"><em>Above \u20b95 crore<\/em><\/td>\n<td width=\"202\"><em>37%<\/em><\/td>\n<td width=\"181\"><em>25% (Capped)<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ul>\n<li><em>Cap on Maximum Surcharge (25%) in New Regime: The highest surcharge (37%) on income above INR 5 crore is removed in the new tax regime. This benefits ultra-high-income individuals who were paying 42.74% effective tax (including cess) under the old regime. Under the new regime, the maximum effective tax rate is 39% (including 4% cess).<\/em><\/li>\n<li><em>Surcharge on Capital Gains &amp; Dividends Limited to 15% in New Regime: For income under Sections 111A (STCG on equities), 112 (LTCG on non-equity assets), and 112A (LTCG on equities), the surcharge is capped at 15% in the new regime. In contrast, the old regime applies higher surcharges (25% or 37%) for taxpayers above \u20b92 crore.<\/em><\/li>\n<\/ul>\n<ul>\n<li><em>No Change for Companies, LLPs &amp; Firms: The revised surcharge rates only apply to individuals, HUFs, AOPs, and BOIs under the new tax regime. Firms, LLPs, and companies continue with the existing surcharge structure.<\/em><\/li>\n<\/ul>\n<ul>\n<li><em>This makes the new tax regime more attractive for high-net-worth individuals with capital gains or dividends, but taxpayers should still evaluate the loss of exemptions\/deductions before opting in.<\/em><\/li>\n<\/ul>\n<ul>\n<li><em>Major Tax Relief for High Earners ( INR 5 Cr+) in the New Regime : The old regime imposed a 37% surcharge, pushing the effective tax rate to 42.74%. The new regime caps surcharge at 25%, reducing the maximum effective tax rate to 39%. High-income earners (INR 5 crore+) benefit significantly under the new regime due to the removal of the 37% surcharge. Those earning capital gains and dividend income under the new regime pay lower surcharges (max 15%). The old regime imposed a 37% surcharge, pushing the effective tax rate to 42.74%. The new regime caps surcharge at 25%, reducing the maximum effective tax rate to 39%. However, for those earning between INR 50 lakh to INR 5 crore, the surcharge rates remain unchanged in both regimes.<\/em><\/li>\n<li><em>Lower Surcharge on Capital Gains &amp; Dividends in the New Regime : In the new regime, capital gains &amp; dividends u\/s 111A, 112, &amp; 112A face a maximum surcharge of 15%. In the old regime, taxpayers earning INR 2 Cr+ could pay 25% or 37% surcharge on such income.<\/em><\/li>\n<li><em>Marginal Relief Applies in Both Regimes : Ensures that a small increase in income doesn\u2019t result in a disproportionate tax burden due to surcharge.<\/em><\/li>\n<li><em>4% Health &amp; Education Cess is Levied in Both Regimes : Cess is calculated on the total tax, including surcharge.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Differences in surcharge rates between New Tax Regime &amp; Old Tax Regime The new regime provides significant tax savings for high-income taxpayers, especially those earning above INR 5 crore or with capital gains\/dividend income. Taxpayers should still evaluate whether the lower surcharge outweighs the loss of deductions before opting for the new regime. Key Differences &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[150],"tags":[10231],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28901"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=28901"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28901\/revisions"}],"predecessor-version":[{"id":28904,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28901\/revisions\/28904"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=28901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=28901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=28901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}