Episode 6 · ITR-2 Practical Computation
Old Tax Regime vs New Tax Regime
Complete ITR-2 Calculation
Step-by-step tax computation for FY 2025-26 (AY 2026-27) — Salary + House Property + Capital Gains + VDA + Other Sources
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Learn ITR-2 filing concepts with these detailed video explanations
New ITR-2 | Latest Update
Video 1 ITR-2 | New Tax Regime
Video 2 ITR-2 | Capital Gains
Video 3 ITR-2 | House Property
Video 4 ITR-2 | VDA & Other Sources
Video 5 ITR-2 | Section 54 Exemption
Video 6 ITR-2 | Old vs New Regime
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Full video series — FY 2025-26 (AY 2026-27) filing guide by CA Devesh Thakur
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Full Series
📋 Problem Illustration
Complete income details for computation — FY 2025-26 (AY 2026-27)
🧑💼 Assessee Details — ITR-2 Computation
Resident Individual · FY 2025-26 · AY 2026-27 · Multiple Heads of Income
📊 Income Details
Salary
₹15,00,000
Gross Salary from Employer
House Property Income
₹4,50,000
Rent Receivable · Interest on Loan ₹1,80,000
STCG u/s 111A
₹85,000
0KFL18D (100 shares) · STT paid
LTCG u/s 112A
₹1,60,000
Canara Robeco MF · Exemption ₹1,25,000
Flat Sale (LTCG u/s 54)
₹25,00,000
Sale ₹75L · Cost ₹50L · Sec 54 exemption ₹25L → Taxable: ₹0
VDA Transfer u/s 115BBH
₹2,00,000
Acquired ₹50K · Sold ₹2.5L · Tax @30%
Savings Bank Interest
₹18,000
Income from Other Sources
FD Interest
₹72,000
Income from Other Sources
Dividend from Shares
₹18,850
TCS ₹15K · Infosys ₹2,100 · REC ₹1,750
📌 Section 54 — LTCG Exemption on Flat Sale:
Sales Consideration ₹75,00,000 · Cost of Acquisition ₹50,00,000 · Capital Gain ₹25,00,000
Reinvestment in House Property: ₹10,00,000 + Capital Gains A/c Scheme deposit: ₹15,00,000
Deduction u/s 54 = ₹25,00,000 → Taxable LTCG from flat = ₹0
Sales Consideration ₹75,00,000 · Cost of Acquisition ₹50,00,000 · Capital Gain ₹25,00,000
Reinvestment in House Property: ₹10,00,000 + Capital Gains A/c Scheme deposit: ₹15,00,000
Deduction u/s 54 = ₹25,00,000 → Taxable LTCG from flat = ₹0
💰 Chapter VI-A Deductions (Old Regime Only)
Sec 80C
PPF ₹5,000 + Home Loan ₹1,65,000 + Tuition ₹11,250 = ₹1,81,250
₹1,50,000
Capped at ₹1,50,000
Sec 80D
Medical Insurance Premium (Own Family)
₹25,000
Sec 80E
Education Loan Interest
₹62,000
Sec 80TTA
Savings Bank Interest
₹10,000
⚠️ New Regime Note: Under Section 115BAC(1A), only deductions u/s 80CCD(2), 80CCH(2), and 80JJAA are allowable. All other Chapter VI-A deductions including 80C, 80D, 80E, and 80TTA are NOT available under the New Tax Regime.
⚖️ Old vs New Regime — Tax Comparison
Complete step-by-step computation · Switch tabs or view side by side
| 📘 COMPUTATION — NEW TAX REGIME (Section 115BAC) | |
|---|---|
| STEP 1: INCOME FROM SALARY (Chapter IV-A) | |
| Gross Salary | ₹15,00,000 |
| Less: Standard Deduction u/s 16(ia) | (₹75,000) |
| Income from Salary | ₹14,25,000 |
| STEP 2: INCOME FROM HOUSE PROPERTY (Chapter IV-C) | |
| Annual Rental Value u/s 23 | ₹4,50,000 |
| Less: Standard Deduction u/s 24(a) @30% | (₹1,35,000) |
| Less: Interest on Housing Loan u/s 24(b) | (₹1,80,000) |
| Income from House Property | ₹1,35,000 |
| STEP 3: INCOME FROM CAPITAL GAINS (Chapter IV-E) | |
| STCG u/s 111A (STT paid) | ₹85,000 |
| LTCG u/s 112A (Canara Robeco MF) | ₹1,60,000 |
| Flat Sale — LTCG (after Sec 54 exemption ₹25L) | ₹0 |
| VDA Transfer u/s 115BBH | ₹2,00,000 |
| Income from Capital Gains | ₹4,45,000 |
| STEP 4: INCOME FROM OTHER SOURCES (Chapter IV-F) | |
| Savings Bank Interest | ₹18,000 |
| FD Interest | ₹72,000 |
| Dividend from Shares | ₹18,850 |
| Income from Other Sources | ₹1,08,850 |
| Gross Total Income (GTI) | ₹21,13,850 |
| STEP 5: DEDUCTIONS (Chapter VI-A) | |
| Deductions u/s 80C / 80D / 80E / 80TTA | NIL |
| Only 80CCD(2), 80CCH(2), 80JJAA allowed under New Regime — None applicable here | |
| Total Income (Taxable) | ₹21,13,850 |
| STEP 6: TAX CALCULATION | |
| Tax on slab income ₹16,68,850 (excluding CG & VDA) | |
| ₹0 – ₹4,00,000 @ Nil | ₹0 |
| ₹4,00,001 – ₹8,00,000 @ 5% | ₹20,000 |
| ₹8,00,001 – ₹12,00,000 @ 10% | ₹40,000 |
| ₹12,00,001 – ₹16,00,000 @ 15% | ₹60,000 |
| ₹16,00,001 – ₹16,68,850 @ 20% | ₹13,770 |
| Tax on Slab Income | ₹1,33,770 |
| STCG u/s 111A @ 20% | ₹17,000 |
| LTCG u/s 112A @ 12.5% on ₹35,000 (after ₹1,25,000 threshold) | ₹4,375 |
| VDA u/s 115BBH @ 30% on ₹2,00,000 | ₹60,000 |
| Total Tax Before Cess | ₹2,15,145 |
| Health & Education Cess @ 4% | ₹8,606 |
| ✅ FINAL TAX — NEW REGIME | ₹2,23,751 |
| 📙 COMPUTATION — OLD TAX REGIME | |
|---|---|
| STEP 1: INCOME FROM SALARY (Chapter IV-A) | |
| Gross Salary | ₹15,00,000 |
| Less: Standard Deduction u/s 16(ia) | (₹50,000) |
| Income from Salary | ₹14,50,000 |
| STEP 2: INCOME FROM HOUSE PROPERTY (Chapter IV-C) | |
| Annual Rental Value u/s 23 | ₹4,50,000 |
| Less: Standard Deduction u/s 24(a) @30% | (₹1,35,000) |
| Less: Interest on Housing Loan u/s 24(b) | (₹1,80,000) |
| Income from House Property | ₹1,35,000 |
| STEP 3: INCOME FROM CAPITAL GAINS (Chapter IV-E) | |
| STCG u/s 111A (STT paid) | ₹85,000 |
| LTCG u/s 112A (Canara Robeco MF) | ₹1,60,000 |
| Flat Sale — LTCG (after Sec 54 exemption ₹25L) | ₹0 |
| VDA Transfer u/s 115BBH | ₹2,00,000 |
| Income from Capital Gains | ₹4,45,000 |
| STEP 4: INCOME FROM OTHER SOURCES (Chapter IV-F) | |
| Savings Bank Interest | ₹18,000 |
| FD Interest | ₹72,000 |
| Dividend from Shares | ₹18,850 |
| Income from Other Sources | ₹1,08,850 |
| Gross Total Income (GTI) | ₹21,38,850 |
| STEP 5: DEDUCTIONS (Chapter VI-A) | |
| u/s 80C — PPF + Home Loan + Tuition (capped at ₹1,50,000) | (₹1,50,000) |
| u/s 80TTA — Savings Bank Interest | (₹10,000) |
| u/s 80D — Medical Insurance Premium | (₹25,000) |
| u/s 80E — Education Loan Interest | (₹62,000) |
| Total Chapter VI-A Deductions | (₹2,47,000) |
| Total Income (Taxable) | ₹18,91,850 |
| STEP 6: TAX CALCULATION | |
| Tax on slab income ₹14,46,850 (excluding CG & VDA) | |
| ₹0 – ₹2,50,000 @ Nil | ₹0 |
| ₹2,50,001 – ₹5,00,000 @ 5% | ₹12,500 |
| ₹5,00,001 – ₹10,00,000 @ 20% | ₹1,00,000 |
| ₹10,00,001 – ₹14,46,850 @ 30% | ₹1,34,055 |
| Tax on Slab Income | ₹2,46,555 |
| STCG u/s 111A @ 20% | ₹17,000 |
| LTCG u/s 112A @ 12.5% on ₹35,000 (after ₹1,25,000 threshold) | ₹4,375 |
| VDA u/s 115BBH @ 30% on ₹2,00,000 | ₹60,000 |
| Total Tax Before Cess | ₹3,27,930 |
| Health & Education Cess @ 4% | ₹13,117 |
| ❌ FINAL TAX — OLD REGIME | ₹3,41,047 |
✅ New Tax Regime
₹2,23,751
Section 115BAC · Lower Tax
| Particular | Amount (₹) |
|---|---|
| Gross Salary | 15,00,000 |
| Less: Std. Deduction | (75,000) |
| Salary Income | 14,25,000 |
| House Property Income | 1,35,000 |
| Capital Gains (STCG+LTCG+VDA) | 4,45,000 |
| Other Sources | 1,08,850 |
| Gross Total Income | 21,13,850 |
| Chapter VI-A Deductions | NIL |
| Total Income | 21,13,850 |
| Slab Tax | 1,33,770 |
| STCG Tax @20% | 17,000 |
| LTCG Tax @12.5% | 4,375 |
| VDA Tax @30% | 60,000 |
| Tax Before Cess | 2,15,145 |
| Cess @4% | 8,606 |
| Final Tax | 2,23,751 |
Old Tax Regime
₹3,41,047
Higher by ₹1,17,296
| Particular | Amount (₹) |
|---|---|
| Gross Salary | 15,00,000 |
| Less: Std. Deduction | (50,000) |
| Salary Income | 14,50,000 |
| House Property Income | 1,35,000 |
| Capital Gains (STCG+LTCG+VDA) | 4,45,000 |
| Other Sources | 1,08,850 |
| Gross Total Income | 21,38,850 |
| 80C | (1,50,000) |
| 80TTA | (10,000) |
| 80D | (25,000) |
| 80E | (62,000) |
| Total Deductions | (2,47,000) |
| Total Income | 18,91,850 |
| Slab Tax | 2,46,555 |
| STCG Tax @20% | 17,000 |
| LTCG Tax @12.5% | 4,375 |
| VDA Tax @30% | 60,000 |
| Tax Before Cess | 3,27,930 |
| Cess @4% | 13,117 |
| Final Tax | 3,41,047 |
🏆 Verdict — Which Regime Wins?
For this assessee, the New Tax Regime saves
₹1,17,296Despite ₹2,47,000 in Chapter VI-A deductions under the Old Regime, the New Regime’s lower slab rates and higher Standard Deduction (₹75,000 vs ₹50,000) result in significantly lower tax.
✅ New Regime
₹2,23,751
Old Regime
₹3,41,047
Tax Saved
₹1,17,296