Tax question: are you richer or poorer?
The answer to the previous question depends on your income level, if you use investments to save taxes and, if so, to what extent. The Budget gives all taxpayers the option to migrate to a new scheme. For income up to Rs 15 lakh, you get a lower tax rate, but this means that you cannot make exemptions, ranging from HRA and for investments in section 80C or medical insurance premium in Section 80D. That clearly implies compensation.
For example, the income between Rs 5 lakh and Rs 7.5 lakh annually will be taxed with 10% in the new regime instead of the 20% that would be paid under the current scheme (which continues as an option). If you have an annual income of Rs 7.5 lakh, this translates into a saving of Rs 25,000 in taxes. Add the 4% cess and you will get a total savings of Rs 26,000. However, this is only possible if you do not claim any deduction or exemption. If you are claiming Rs 1.25 lakh or more as deductions or exemptions, say for the standard deduction (Rs 50,000 flat are allowed) plus other deductions under Section 80C - say for PF, LIC premium or mortgage loan interest - then it is better to continue under the current regime because the gain will be more than offset by the addition to the taxable income.
Let's move forward If you have an annual income of Rs 10 lakh, this translates into a savings of Rs 39,000, assuming you have not claimed any deduction or exemption. But, generally, an individual would make use of a standard deduction and have some investments. So, if you claim Rs 1.87 lakh or more as deductions/exemptions, again, it is better not to change.