Income Tax Slab: Which is the most beneficial in the old and new tax system, know what the experts say?

New or Old Tax Regime: If you wish to get tax exemption whereas submitting Income Tax Return (IT Return), then earlier than that it’s best to know about the exemptions obtainable below the new and old tax system.

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This will inform how a lot profit the taxpayers will get from tax exemption by submitting IT Return below the new tax system and how a lot profit can be there below the old system. After getting this data, it will likely be straightforward to decide on the new and old tax system. Let us know what the experts say about the exemptions obtainable below the new tax system and the old tax system.

Exemptions below the new tax regime

Tax supervisor Surendra Pandit stated that below the new tax system, if a salaried particular person is going to file IT return, then he’ll get exemption below commonplace deduction in the new tax system on wage as much as Rs 50,000. Apart from this, there is a provision of exemption on household pension as much as Rs 15,000 below the identical commonplace deduction. He stated that in the new tax system, there is a provision of exemption below regular 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 workers.

Also Read: Post Office RD Scheme: By depositing Rs 7000 each month, you’re going to get Rs 4,97,400 on maturity date

Who is not going to get exemption below the new tax system

Surendra Pandit additional stated that in the new tax system, there is no provision for exemption of leisure tax below part 16 (ii) of Income Tax and skilled tax below part 16 (iii) for salaried individuals. Apart from this, there can be no exemption on House Rent Allowance (HRA), Leave Travel Allowance (LTA) and different sorts of allowances in the new tax system. Along with this, there can be no exemption below part 80C, 80D and 80G of Income Tax in the new tax system.

What is the provision of exemption in the old tax system

He stated that whereas submitting IT returns in the old tax system, there is a provision for exemption below commonplace deduction in the new tax system for salaried and businessmen on wage as much as Rs 50,000, exemption on household pension as much as Rs 15,000, regular 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 workers. Apart from this, salaried individuals may even be given exemption in leisure tax below Section 16 (ii) of Income Tax and skilled tax below Section 16 (iii), exemption on House Rent Allowance (HRA), Leave Travel Allowance (LTA) and different sorts of allowances and exemption below Section 80C, 80D and 80G.

What a taxpayer ought to do and what he shouldn’t do

Surendra Pandit advises taxpayers that the tax slab fee has been lowered in the new tax system. The benefit of coming to the new system is that when you declare a complete exemption of Rs 4 lakh or Rs 4.5 lakh, then you will have a bonus in staying in the old tax system. Now what is in this 4.5 lakh? So, if it’s important to declare 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 curiosity on housing lease, then there is a bonus in selecting the old tax system, in any other case the new tax system is beneficial for frequent individuals.

File ITR on time to stay in the old system

Chartered Accountant Vinod Banka says that the level to notice is that the Income Tax Department has made the new tax system by default. If an individual doesn’t decide ​​for the old tax system, he’ll routinely go to the new tax system. In such a scenario, those that take huge exemptions in earnings tax is not going to get it. They should decide earlier than the choice. Therefore, you’ll have to go for the old tax system earlier than submitting IT returns . Not solely this, it is essential to file IT returns on time to stay in the old tax system.

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