Let us tell you that the post office offers better interest rates than most banks, which along with these tax benefits is an attraction for customers seeking higher returns on their savings. Let us know how you can earn more along with income tax exemption by opening a Post Office Savings Account (POSA).

You can avail discount up to 10 thousand

The Post Office Savings Account (SB) works just like a normal bank savings account, with a minimum deposit amount of Rs 500 and a minimum withdrawal amount of Rs 50. There is no maximum investment limit and investors can enjoy tax exemption up to Rs 10,000. This account also offers an interest rate of 4% for the period April-June 2025.

Under the Income Tax Act, 1961, POSA provides tax exemption on interest income under section 10(15)(i), which is applicable under the new tax regime. This exemption allows a single account holder to claim a tax deduction of up to Rs 3,500 and a joint account holder up to Rs 7,000, which is over and above the normal tax deductions available for savings accounts.

Tax Deduction under Section 80TTA

Tax deductions under Section 80TTA allow general taxpayers to claim up to Rs 10,000 on interest income from savings accounts. This is applicable to accounts with banks, cooperative societies and post offices. For senior citizens, a higher deduction of up to Rs 50,000 is available under Section 80TTB. These deductions cover interest earned from savings accounts, fixed deposits and recurring deposits, providing significant relief to senior citizens compared to other taxpayers. However, these deductions are not applicable under the new tax regime.

Higher interest than banks

The interest rates offered by post office savings accounts are typically higher than those offered by banks, making them a better option for investors seeking better returns. This is especially important in the current economic environment, where savers look for safe and profitable options. The strategic position of POSAs, along with their competitive rates and tax benefits, makes them a better choice for many individuals.

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The government believes that this is a more effective way of providing direct relief to the people instead of schemes. The government is thinking of giving you more money in your hands. It may sound a little strange, but it is true. In the budget coming in July, the government can change the tax rules. Till now, those who earn Rs 3 lakh do not have to pay any tax. However, now the government is considering increasing this limit to Rs 5 lakh.

This means that the government is thinking of increasing the exemption limit. But, this rule will apply only to those who choose the new tax system. In the old tax system, you get many types of exemptions. In the new system, the tax is less and there are no exemptions. The government hopes that this will bring more money in the hands of the people. They will be able to buy more goods. This will strengthen the country’s economy. The final seal will be put on it close to the budget.

Also Read: MCD Property Tax: 10% discount on paying property tax by 30 June. know everything

The exemption limit in income tax is the maximum income amount on which you do not have to pay income tax. This limit depends on many factors including your age, residential status and the claim made on your behalf.

Demand to reduce the highest tax rate

A section of the industry has also requested the government to reduce the highest tax rate in the new tax system from 30% to 25%. But the chances of this happening are very low. A government official said that there is little possibility of any change in the tax for those earning more because the need right now is to provide relief to those who earn less.

The government does not want to make any changes in the old tax system either. This is because the government wants more and more people to adopt the new tax system. In the new tax system, those earning more than Rs 15 lakh have to pay the maximum tax of 30%, whereas in the old system this limit is Rs 10 lakh.

What is the government’s intention?

The government wants to give more money to the people by reducing taxes. Instead of increasing expenditure on subsidies and other schemes. This is because many times the full benefit of these schemes does not reach the needy people.

A government official said that boosting the economy by cutting taxes is better than spending money on welfare schemes. This is because sometimes the money is not used properly in the schemes. The full benefit does not reach the people. There has been a decrease in the purchasing power of the people in the country, which is the lowest in the last 20 years.

This is happening at a time when the Indian economy is growing rapidly. In such a situation, the government wants more money in the hands of the people so that they can buy more goods and the economy gets more momentum.

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This will tell how much benefit the taxpayers will get from tax exemption by filing IT Return under the new tax system and how much benefit will be there under the old system. After getting this information, it will be easy to choose the new and old tax system. Let us know what the experts say about the exemptions available under the new tax system and the old tax system.

Exemptions under the new tax regime

Tax manager Surendra Pandit said that under the new tax system, if a salaried person is going to file IT return, then he will get exemption under standard deduction in the new tax system on salary up to Rs 50,000. Apart from this, there is a provision of exemption on family pension up to Rs 15,000 under the same standard deduction. He said that in the new tax system, there is a provision of exemption under normal 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 employees.

Also Read: Post Office RD Scheme: By depositing Rs 7000 every month, you will get Rs 4,97,400 on maturity date

Who will not get exemption under the new tax system

Surendra Pandit further said that in the new tax system, there is no provision for exemption of entertainment tax under section 16 (ii) of Income Tax and professional tax under section 16 (iii) for salaried people. Apart from this, there will be no exemption on House Rent Allowance (HRA), Leave Travel Allowance (LTA) and other types of allowances in the new tax system. Along with this, there will be no exemption under section 80C, 80D and 80G of Income Tax in the new tax system.

What is the provision of exemption in the old tax system

He said that while filing IT returns in the old tax system, there is a provision for exemption under standard deduction in the new tax system for salaried and businessmen on salary up to Rs 50,000, exemption on family pension up to Rs 15,000, normal 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 employees. Apart from this, salaried people will also be given exemption in entertainment tax under Section 16 (ii) of Income Tax and professional tax under Section 16 (iii), exemption on House Rent Allowance (HRA), Leave Travel Allowance (LTA) and other types of allowances and exemption under Section 80C, 80D and 80G.

What a taxpayer should do and what he should not do

Surendra Pandit advises taxpayers that the tax slab rate has been reduced in the new tax system. The advantage of coming to the new system is that if you claim a total exemption of Rs 4 lakh or Rs 4.5 lakh, then you have an advantage in staying in the old tax system. Now what is in this 4.5 lakh? So, if you have to claim 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 interest on housing rent, then there is an advantage in choosing the old tax system, otherwise the new tax system is beneficial for common people.

File ITR on time to remain in the old system

Chartered Accountant Vinod Banka says that the point to note is that the Income Tax Department has made the new tax system by default. If a person does not opt ​​for the old tax system, he will automatically go to the new tax system. In such a situation, those who take big exemptions in income tax will not get it. They will have to opt before the option. Therefore, you will have to opt for the old tax system before filing IT returns . Not only this, it is necessary to file IT returns on time to remain in the old tax system.

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The government wants more and more people to adopt the new system. That is why the government has made the new tax system a default. However, taxpayers still have the option of opting for the old tax regime.

This is what it means to make default

First of all, let us know what it means to make the new tax system default. This means that if you do not inform your employer about your preferred tax regime, then the new tax regime option will automatically be decided for you. Simply put, it means that if you are a salaried person, your silence will be accepted by the Income Tax Department as yes for the new tax regime.

CBDT has given this instruction

In fact, the Central Board of Direct Taxes (CBDT) asked the employers to ask the employees whether they want to remain in the new or old tax regime. Tax on salary will be calculated according to the tax regime and the employer will deduct tax at source ie TDS. In such a situation, the question arises whether taxpayers get a chance to change an option once they have chosen it and if yes, how many times they can be switched.

If you want to earn from business then this is your chance

The Income Tax Department gives you the facility to change the option even after the default option. However, the facility to switch between the two systems is only available to those taxpayers who are getting income from salary and are not earning anything from business. Taxpayers with business income, once they opt for the new tax regime, they get only one chance to go back to the old regime. They cannot switch it again in future also.

This facility for salaried

Talking about salaried taxpayers, if they do not choose the option at the beginning of the financial year, then the new tax regime will be selected by default. After this, according to the slab of the new system, the company will deduct TDS from his salary. However, later he can switch to the old tax regime while filing returns and can claim refund if more tax has been deducted according to this regime. Such taxpayers can also switch between the two tax regimes later.

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However, what happens if a taxpayer is unable to choose between the new and old tax regimes? Regarding this, now a notification has also been issued by the government department.

Income Tax

Now the Central Board of Direct Taxes (CBDT) has issued a new notification regarding the new tax regime. It states that if an employee fails to choose between the new and old tax regime, the employer will default to the new income tax regime and deduct tax deducted at source (TDS) under it. According to Finance Minister Nirmala Sitharaman, the new tax regime will be in default from the financial year 2023-24. Under this, CBDT has issued a circular regarding TDS deduction.

The Income Tax Regime

Notification states, “If the information is not furnished by the employee, it shall be presumed that the employee continues to be in the default tax regime and has not exercised the option to opt out of the new tax regime.” In this case the employer shall deduct tax at source on the income under section 192 of the Act at the rates provided under sub-section (lA) of section 115BAC of the Act.”

Tax It is the responsibility of the employer to ask the employee for information regarding the desired tax regime and after obtaining the information, deduct tax accordingly. In such a situation, let us know the difference between the new and old tax regime…

Under the new tax regime, the basic exemption limit has been increased to Rs 3 lakh. The amount of exemption under section 87A has been increased to a taxable income of Rs 7 lakh. A standard deduction of Rs 50,000 has also been introduced in the system. Salaried employees and pensioners can opt for standard deduction of Rs 50,000 under the new income tax regime.

Old Tax Regime

Those who want to continue with the old income tax regime will get exemptions like Section 80C, which can bring down the taxable income by up to Rs 1.5 lakh. There has been no change in the tax slab and basic exemption limit. The old tax regime also offered deductions on loans and health insurance premiums. Those who want to opt for the old tax regime will have to indicate the same every year.

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Income tax slabs have been made for this. At the same time, tax is collected according to the new tax regime and the old tax regime. However, now some people will also have to pay 30 per cent tax. Let’s know about it…

Tax slab

Individual taxpayers have to pay income tax on the basis of the slab system in which they fall. Individuals may fall in a different tax bracket on the basis of their income. As a result, higher income earners will have to pay more tax. The slab system has been implemented to keep the country’s tax system uniform.

Old tax system, whereas at present, for the financial year 2022-23, if someone files income tax under the old tax system and his age is less than 60 years, then he will have to file tax as mentioned below. According to this system, if someone files tax, then he will have to pay more than 30% tax on annual income of more than Rs 10 lakh.

Rs 2.5 lakh per annum income – No tax
Rs 2.5-5 lakh per annum income – 5 per cent tax
Rs 5-10 lakh per annum income – 20 per cent tax
Income above Rs 10 lakh per annum – 30 per cent income tax

In the new tax system , the income tax slabs are different in the new tax system. If someone files income tax return according to the new tax regime, then he will have to pay tax on different incomes according to different slabs. In such a situation, if someone’s income is more than Rs 15 lakh under this system, then they will have to pay 30 percent tax.

Rs 3 lakh annual income – No tax
Rs 3-6 lakh annual income – 5% tax
Rs 6-9 lakh annual income – 10% tax
Rs 9-12 lakh annual income – 15% tax
Rs 12-15 lakh annual income – 20% tax
Income above Rs 15 lakh per annum – 30% tax

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Significantly, last year these forms were issued in the first week of April. Many types of investments help you to save income tax. One of these is House Rent Allowance ie HRA. If you are a salaried employee then you can take advantage of this. Let us tell you that to save tax, you can take advantage of HRA only in the old tax system. This will not be available in the new tax system.

Will get benefit in these circumstances

House rent allowance ie (HRA) in salary is a part of taxable income. Income tax is exempted under section 10 (13A) of the Income Tax Act. Keep in mind some circumstances for how much tax can be saved from HRA. In the situation in which the minimum amount will come, you can take advantage of tax exemption of HRA.

In the first situation, first of all, you should see how much HRA is there in the salary. HRA is 50% of the basic salary in metro cities and 40% of the salary in non-metro cities. The third condition is the amount left after deducting 10% of the annual salary from the annual house rent.

This is how you can save

You can understand how much you can save in HRA through an example. A person works in Delhi and lives in a rented house. His rent goes to 15 thousand rupees every month. He gets a maximum of one lakh rupees as HRA annually from his company. At the same time, his basic salary is 25 thousand rupees and dearness allowance is two thousand rupees. In this way, a salaried person can save a maximum of one lakh rupees.

These documents are necessary

To get exemption through house rent allowance, you must first have a rent agreement. Monthly rent, fixed time limit of the agreement, and expenses should be mentioned in this agreement. This rent agreement should be in stamp paper of Rs 100 or Rs 200. On the other hand, if the annual rent is more than one lakh rupees, then it is also necessary to have the PAN card of the landlord.

Apart from this, you should also have a receipt for paying the rent. Let us tell you that if your annual income is up to Rs 50 lakh, then you will have to fill Form 1 for ITR filing. Those earning more than 50 lakhs will have to fill ITR Form 2.

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Reuters has given this information on Tuesday quoting two government sources. The final decision will be taken by the PMO . On the other hand, till now no official statement has come out from the Finance Ministry in this matter.

Because of this, the new tax system is not liked

In fact, the new Optional Income Tax Scheme, in which tax rules were simplified and taxation relief was also given, could not attract most of the people. Explaining this, experts say that this taxation system does not give tax exemption on rental home and insurance, among other things. One of the government sources said, “The new income tax system allowing exemptions and tax deductions would complicate it and was not the intention of launching this scheme.”

How is the new tax slab

At present, taxpayers have the opportunity to choose between the old and the new tax system. The government has not made public the figures of the number of people who will take advantage of the new tax system. Income tax in the country is levied on a minimum annual income of Rs 500,000 per year.

Those earning between Rs 500,000-Rs 750,000 per annum have to pay 10 per cent tax under the new scheme as against 20 per cent applicable under the old rules, while annual income above Rs 15 lakh is taxed at 30 per cent tax is levied.

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