For the FY 23-24, my income from salary is ?7,02,876 as per form 16. I also have interest income of ?9,120. I also sold mutual funds and had long term capital gains of ?87,983. I want to know as to how my total income and tax would be computed. I was under the impression that my salaries and interest income will be treated differently and will not be eligible for tax under the new tax regime and my long term capital gain will be exempted since it is less 1 lakh, thus resulting in nil income tax. Is it correct or not?

Ans: Hi Ananda
As compared to the old tax regime, you would be better off in the new tax regime. The tax savings could be about Rs. 1.30 Lakhs

In case you had opted the new tax regime in the last year as well then between last year and the current year, your tax savings would be about Rs. 54,000

Ans: Yes, as total income crosses 7 lacs, rebate will not be available and you have to pay tax. You can calculate tax from income tax calculator https://incometaxindia.gov.in/Pages/tools/income-tax-calculator-234ABC.aspx

Ans: Based on your scenario, here's how your capital gains tax will be calculated:

Capital Gains from Equity Mutual Funds:

You mentioned Rs. 6.25 lakh as capital gains from equity mutual funds.
Long-term capital gains (held for over 1 year) on equity mutual funds exceeding Rs. 1 lakh are taxed at 10% without indexation benefit.
Tax Calculation:

Taxable capital gains = Rs. 6.25 lakh (total capital gains) - Rs. 1 lakh (exempt limit) = Rs. 5.25 lakh
Capital Gains Tax:

You'll need to pay tax on Rs. 5.25 lakh at 10% = Rs. 52,500
Overall Tax Liability:

Here's how to determine your overall tax liability for FY 23-24:

Combine your Income Sources: Add your salary income, interest income from FDs, RDs, and savings account to the Rs. 52,500 capital gains tax.
Deductions and Exemptions: You can then factor in any deductions and exemptions you're eligible for under the Old or New tax regime (whichever offers a lower tax liability).
Net Tax Liability: After applying relevant deductions and exemptions, calculate your final taxable income. If the final taxable income falls below the minimum taxable limit, your net tax liability becomes zero.
Key Points:

Capital gains tax is calculated separately from your salary and interest income.
You can choose the tax regime (Old or New) that minimizes your overall tax liability. Explore both options using a tax calculator or consult a tax advisor for a more accurate assessment.
Remember, this is a general overview. Tax rules and exemptions can be subject to change. For a definitive assessment of your tax situation, consider consulting a qualified tax advisor who can consider all your income sources, deductions, and exemptions applicable to your specific circumstances.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: Assuming mutual fund redeemed are equity based scheme, tax on said redemption will be NIL. Tax on salary and interest will be Rs26,200 plus cess.

You can calculate tax at https://incometaxindia.gov.in/Pages/tools/income-tax-calculator-234ABC.aspx

Ans: Assuming 18 lacs doesn't include any special rate income, tax liability for FY 24 25 based on proposed amendment (after standard deduction of 50000) will be 215800