Good morning [%first_name |Dear Reader%],

Amidst all the frenzied number-crunching and comparative analyses on the new and old tax regimes earlier this month, another key change to the tax code went unnoticed. The gross annual income limit for presumptive taxation has been raised from Rs 50 lakh (~US$60,400) to Rs 75 lakh (~US$90,600) for certain professionals. 

This can translate into some very tidy tax savings for these taxpayers, so the million-dollar question (no pun intended) is: are you one of these lucky ‘professionals’? 

And if you’re not, can you make the jump from being an ‘employee’ to a ‘professional’? Should you? 

Let’s see. 

Professional advantage

One of the pet peeves of ‘employees’ is how much tax they have to pay. And the grouse is legit. Here’s why. 

Say, you are an employee with an annual salary of Rs 25 lakh (US$30,200) and can claim investment deductions in the old tax regime of Rs 2 lakh (~US$2,400). Going by this tax calculator recently put up by India’s Income Tax Department, next year, you will be taxed Rs 5.07 lakh (US$6,100) in the old tax regime and about Rs 4.52 lakh (US$5,460) in the new tax regime.