New or Old Tax Regime: If you want to get tax exemption while filing Income Tax Return (IT Return), then before that you should know about the exemptions available under the new and old tax system.
This will tell how much benefit the taxpayers will get from tax exemption by filing IT Return under the new tax system and how much benefit will be there under the old system. After getting this information, it will be easy to choose the new and old tax system. Let us know what the experts say about the exemptions available under the new tax system and the old tax system.
Exemptions under the new tax regime
Tax manager Surendra Pandit said that under the new tax system, if a salaried person is going to file IT return, then he will get exemption under standard deduction in the new tax system on salary up to Rs 50,000. Apart from this, there is a provision of exemption on family pension up to Rs 15,000 under the same standard deduction. He said that in the new tax system, there is a provision of exemption under normal depreciation (Income Tax Section 32) for businessmen, Income Tax Section 80CCD (2) for NPS employers, Income Tax Section 80CCH for Agniveers and Income Tax Section 80JJAA for new employees.
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Who will not get exemption under the new tax system
Surendra Pandit further said that in the new tax system, there is no provision for exemption of entertainment tax under section 16 (ii) of Income Tax and professional tax under section 16 (iii) for salaried people. Apart from this, there will be no exemption on House Rent Allowance (HRA), Leave Travel Allowance (LTA) and other types of allowances in the new tax system. Along with this, there will be no exemption under section 80C, 80D and 80G of Income Tax in the new tax system.
What is the provision of exemption in the old tax system
He said that while filing IT returns in the old tax system, there is a provision for exemption under standard deduction in the new tax system for salaried and businessmen on salary up to Rs 50,000, exemption on family pension up to Rs 15,000, normal depreciation ( Section 32 of Income Tax ), Income Tax Section 80CCD (2) for NPS employers, Income Tax Section 80CCH for Agniveers and Income Tax Section 80JJAA for new employees. Apart from this, salaried people will also be given exemption in entertainment tax under Section 16 (ii) of Income Tax and professional tax under Section 16 (iii), exemption on House Rent Allowance (HRA), Leave Travel Allowance (LTA) and other types of allowances and exemption under Section 80C, 80D and 80G.
What a taxpayer should do and what he should not do
Surendra Pandit advises taxpayers that the tax slab rate has been reduced in the new tax system. The advantage of coming to the new system is that if you claim a total exemption of Rs 4 lakh or Rs 4.5 lakh, then you have an advantage in staying in the old tax system. Now what is in this 4.5 lakh? So, if you have to claim a deduction of Rs 4.5 lakh by combining Rs 1.5 lakh in 80C, Rs 50,000 in 80D, Rs 50,000 in NPS and Rs 2 lakh interest on housing rent, then there is an advantage in choosing the old tax system, otherwise the new tax system is beneficial for common people.
File ITR on time to remain in the old system
Chartered Accountant Vinod Banka says that the point to note is that the Income Tax Department has made the new tax system by default. If a person does not opt for the old tax system, he will automatically go to the new tax system. In such a situation, those who take big exemptions in income tax will not get it. They will have to opt before the option. Therefore, you will have to opt for the old tax system before filing IT returns . Not only this, it is necessary to file IT returns on time to remain in the old tax system.
