A large part of the salary of working people goes into paying taxes. But most of the people are not aware that whether there is more tax exemption in the new tax regime or the old tax regime (Old vs New Tax Regime). If you pay tax and want to get tax exemption, then you can save lakhs of rupees by filing ITR under the new tax regime. Let us know in detail in the news below
If you pay tax then this news is useful for you. Actually, taxpayers have two options to pay tax. First is Old Tax Regime and second is New Tax Regime. If you do not choose any tax regime from these two options, then your income tax return will be automatically filed under the new tax regime. Taxpayers believe that filing ITR under the old tax regime leads to greater tax savings. But, if you have chosen the new tax regime then there is no need to worry, today we will tell you some such methods in this article. By adopting these, you can avail tax exemption in this also.
Those doing jobs and business can do this every year
The central government had introduced the new tax regime during the budget of 2020. After this, the new tax regime has been made the default in the budget of 2023. That is, if you do not choose the old tax regime while paying tax, then your tax will automatically be calculated according to the new tax regime. If you do job or business then you can choose old and new tax regime every year.
If you do not fall in either of these two categories, you will get this opportunity only once. That means, after choosing one of the old and new tax regimes, it cannot be changed again. If you are self-employed, you will be able to avail the benefits of the old tax regime only once. To avail this benefit, you will have to fill Form 10-IE along with Income Tax Return (ITR). You have to submit Form 10IE to the Income Tax Department before filing ITR.
What is the difference between old and new tax regime?
You get about 70 types of deductions and exemptions in the Old Tax Regime. Not only this, you can also avail tax exemption of up to Rs 1.5 lakh in income tax under Section 80C. You do not get the benefit of many big tax exemptions including Section 80C in the New Tax Regime. Now this tax system has been made the default. However, you can make changes in this every year. That means, one year you can choose old tax regime and the next year you can choose new and then old tax regime.
This is how you can get tax exemption in the new regime
1. Standard deduction was earlier available only in the old tax regime. Now it has also been included in the new tax regime. This means that your taxable income will directly reduce by Rs 50 thousand. If the taxpayer falls in the disabled category, he can claim deduction i.e. tax exemption on transport allowance. This relaxation will be applicable to both private and government sector employees.
2. If you are employed, you can avail tax exemption on travel, transport and other allowances received for office work in the new tax regime. If you are doing office work from some other place and are paid to meet the expenses there, then income tax can be claimed on this also.
3. Under Section 10(10C) of Income Tax, if someone takes Voluntary Retirement Scheme (VRS), then with certain conditions, he can also avail exemption in the new tax regime on gratuity and leave encashment i.e. money received in lieu of remaining holidays. Could. There will be no tax on this.
4. In the new tax regime, you can also avail tax exemption on gifts. If you give a gift of Rs 50,000 to your brother, sister or any relative, you can avail tax exemption on that too. A taxpayer can claim income tax exemption only on gifts up to Rs 50,000 in a financial year.
5. You can also avail tax exemption under Section 24 on home loan interest under certain special circumstances in the new tax regime. This exemption is available when you are paying interest on the loan of a house which you have given on rent.
6. The money deposited by the employer into the National Pension Scheme (NPS) account of the employee gets tax exemption. Apart from this, tax exemption is also given on additional investment of Rs 50 thousand in Tier 2 account of NPS. You get this exemption in both the old tax regime and the new regime.
7. Taxpayers who earn through family pension can also get tax exemption on this amount. Under Section 57 of Income Tax, the amount of such family pension has been kept out of the scope of income tax in the new tax regime also. Rebate can be claimed on this amount.
Tax slabs of new tax regime
- 1. In the new tax regime, no tax has to be paid on annual income of Rs 0-3 lakh.
- 2. 5 percent tax has to be paid on income of Rs 3 to 6 lakh and 10 percent tax has to be paid on income of Rs 6 to 9 lakh.
- 3. 15 percent tax has to be paid on earnings of Rs 9 to 12 lakh, 20 percent on earnings of Rs 12 to 15 lakh and 30 percent on earnings above Rs 15 lakh.
- 4. Along with this, 4 percent tax is also levied as health and education cess.
