Income Tax Return: The new financial year has started and many smart investors want to plan their taxes from the very beginning.
When it comes to filing income tax returns, the first thing that comes to mind is whether to opt for the old income tax regime or go for the new one, especially after the government announced some new and exemptions in the budget 2023. is also given. Whether it is an investor or a trader, the choice of tax regime will depend on which income group one comes in and how one can get the benefit of exemption in the old system.
Income tax return
In the old tax system, first the benefit of standard deduction is given by the government. At the same time, in the budget 2023, it has been announced by the government to give the benefit of standard deduction in the new tax regime. After this order, taxpayers will get the benefit of standard deduction even after filing ITR with the new tax regime. Also, now the new tax regime will be the default tax regime.
Standard deduction
In the financial year, those who opt to remain in the new tax regime, will get the benefit of standard deduction of Rs 50,000 under section 16 (IA) of the Income Tax Act 1961. However, the benefit of standard deduction is not available to all. Standard deduction of Rs 50,000 is available only to those taxpayers who draw income from salary or who are in receipt of pension. In such a situation, people getting salary and people getting pension can take advantage of standard deduction of Rs 50,000 while filing income tax return.
Giving relief to salaried and pensioners, a standard deduction of Rs 50,000 was introduced by the Income Tax government, which can be claimed on salary and pension. Standard deduction is a flat deduction from gross salary, which means taxpayers do not have to file a separate application for claiming standard deduction. Also, no document is required to take advantage of it.
