The time to file income tax return is fast approaching. In such a situation, many questions will be coming in the mind of taxpayers that which tax system they should choose. On one hand, in the old tax system, where there is a provision of many exemptions. On the other hand, the Finance Ministry has made many changes giving relief to individual taxpayers. For example, no tax has to be paid up to Rs 7 lakh. Apart from this, some benefits will be seen in the new tax regime.
Today we are going to tell you 4 advantages of the new tax system, about which many people will not be aware. Keeping these things in mind, you can choose any one tax regime before filing the tax return. So let’s know about the four major changes in the new tax regime.
New tax slab
The government wants more and more people to shift to the new tax regime. That’s why changes have also been made in the tax slab in the new tax regime. There are 6 tax slabs in the new regime. In this, no tax has to be paid on income up to Rs 3 lakh. After this, 5 percent tax is being increased on every increase of Rs 3 lakh.
Standard Deduction
Earlier, standard deduction was available only to people in the old tax regime. Now those opting for the new tax system will also get its benefit. Taxpayers will get standard deduction of 50,000. This means that apart from Rs 3 lakh and up to Rs 50,000, exemption will be given without any documents. Pensioners can also claim standard deduction of up to Rs 15,000.
Discount limit increased
In the new tax regime, the basic exemption limit has been increased to Rs 3 lakh. It was earlier Rs 2.50 lakh. That is, people earning up to Rs 3 lakh have been freed from the worry of paying tax. In the old tax regime, this exemption is only up to Rs 2.50 lakh.
Tax exemption up to 7 lakhs
Although in the new tax regime, income up to 3 lakhs has been excluded from the tax slab, but even if a person’s income is not reaching Rs 7 lakhs, he will not have to pay any tax. Not only this, if standard deduction is also added, then income up to Rs 7.50 lakh has been made tax-free. However, on earning more than this, tax will have to be paid as per the tax slab. For example, no tax up to Rs 7.5 lakhs, but after 7.5 lakhs, the calculation of tax will start from the slab after 3 lakhs.
