New Tax Regime Deductions:
If you earn income from your salary or business, then it is time to get ready to file your income tax return (ITR Filing for FY23-24).
In March, taxpayers were working overtime on tax calculators and tax savings. And now they have a structure of two tax regimes each.
If you have invested and want to save tax, then in this regard taxpayers prefer to choose the Old Tax Regime, but given the low tax rate, there is no dearth of people choosing the New Tax Regime.
There have been many changes in the new tax regime in the last budget, due to which it has become even more attractive.
Do you know that you can also avail some deductions in the new tax regime?
Special features of the New Tax Regime
You must be aware that the new tax regime has now become the default option after Budget 2023.
When it was introduced in the budget of 2020, taxpayers could choose it separately.
But now this is the default, that is, if you do not manually select the option to choose the old tax regime, then your ITR will be filed in the new tax regime only.
What exemptions can be availed in the New Tax Regime?
1. While earlier there was no provision for standard deduction in the new tax regime, after Budget 2023, now a rebate of Rs 50,000 is available in this regime, no matter which tax slab the taxpayer comes under, this rebate is available to everyone.
2. If taxpayers fall in the disabled category, they are allowed to claim a deduction on transport allowance.
3. Employed people also get exemptions on the perks or allowances they get for travel, transport, conveyance, and office work.
4. Voluntary Retirement Scheme (VRS) - now exemption is also available on gratuity and leave encashment with certain conditions.
5. Tax exemption can be availed on gifts up to Rs 50,000.
6. Employed people investing in an NPS (National Pension System) account can also claim tax deduction on their contribution.
7. If you are earning income from a family pension, then under the new regime you can claim a deduction of up to Rs 15,000 or one-third of the pension amount (whichever is less).
New Tax Regime Income Tax Slabs
In the new tax regime, there is no tax on annual salary of Rs 0-3 lakh. After this, 5% tax is levied on income of Rs 3 to 6 lakh, 10% on income of Rs 6 to 9 lakh, 15% on income of Rs 9 to 12 lakh, 20% on income of Rs 12 to 15 lakh and 30% on income above Rs 15 lakh. Apart from this, 4% is charged as Health and Education Cess.
Income Slab Income Tax Rate
0 – Rs. 3,00,000 nil
Rs. 3,00,000 – Rs. 6,00,000 5%
Rs. 6,00,000 -Rs. 9,00,000 10%
Rs. 9,00,00 – Rs. 12,00,000 15%
Rs.12,00,000 – Rs.15,00,000 20%
Above Rs. 15,00,000 30%
