International Journal of Research and Review DOI: https://doi.org/10.52403/ijrr.20210864 Vol.8; Issue: 8; August 2021 Website: www.ijrrjournal.com Short Communication E-ISSN: 2349-9788; P-ISSN: 2454-2237 International Journal of Research and Review (ijrrjournal.com) 478 Vol.8; Issue: 8; August 2021 Income Tax Regime- Old Vs New Tushar D. Bagul Department of Commerce, K. K. W Arts, Science, Commerce and Computer Science College Chandori, 422201, Nashik, MS (India) ABSTRACT The Government of India has announced new tax slab in Union Budget 2020-21. This new tax slab is also called as Optional tax regime because Government has not abolished old tax regime. The tax payer has option to choose the tax regime i.e. either Old or New which is better for them. The new tax regime has lower tax slab as compared to old tax structure. The taxpayer has given an option to either choose new tax structure with lower tax slab or the old tax one with tax benefit but higher tax slabs. The old tax regime enable taxpayer to avail existing tax exemption such as Leave Travelling Allowance, House Rent Allowance & deductions available under Income Tax Act, 1961. While those who are opting new tax regime will not have to avail advantages of existing exemptions & deductions that are available under old tax regime. The old tax regime has higher tax rate and three tax slab, whereas new tax regime has lower tax rate & six tax slabs. There is similarity in tax rate in case of individual below 60 years of age in both tax regime as it is exempted up to 2.5 lakh. In addition to this as per Section 87A (Introduced in Finance Act, 2003) Individual who is resident of India for Income Tax purpose, is entitled to claim tax rebate up to Rs.12,500 against tax liability if his/her Income does not exceed Rs.5,00,000 for old as well as new tax regime. Keywords: Income Tax, Tax Slab, Exemptions, Deductions, Old Vs New Tax Regime. INTRODUCTION The objective of this research article is to understand Tax structure of India and the difference between Old Tax regime & New Tax regime & its implication. Income Tax is a kind of tax that government levies on individual & businesses. Income taxes are the source of revenue for government, they are used to fund public services, pay government obligations etc. As per Income Tax Act, 1961 every Individual or Artificial Person (Corporate Body) has to pay income tax whose income goes beyond threshold limit set by act. [1] Income Tax is a percentage that individual person or businesses paid to the Government to run nation smoothly, Infrastructural development etc. Tax Compliance by citizens implies compliance with all statutory obligations specified in the tax law, including registration as a taxpayer, maintaining required records, filing timely, accurate tax returns and paying taxes correctly and on time. [2] All taxes are levied based on finance act passed by government. Income Tax plays an important role as a source of revenue and effective measure to remove disparity. After Independence, each & every aspect of Indian tax system was studied thoroughly and all possible attempts were made to make system equitable. [3] The Income Tax system has a three tier federal structure. The tax structure consists of the central government, state government and local municipal bodies. [4] There are two type of taxation system in India i.e. Direct Taxes & Indirect Taxes. Income Tax falls under direct tax system. The direct tax collection in India has been increasing continuously since 30 years. [5] The Tax collection involves some money cost for government and compliance cost for taxpayer. Government should minimise administrative cost but it doesn’t mean to decrease administrative staff but administration should make effective & efficient. [6] The new tax regime is not