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 salaried class is expecting the Standard Deduction to increase over a period of time. It has been almost five years since the standard deduction was revised. The standard deduction was last changed in the year 2019. The budget of 2024 will be only an interim budget and the Finance Minister has already said that there will be no major announcements in the budget. There are reports that the government may increase the standard deduction to Rs 90,000 in the budget.

Will the standard deduction increase to Rs 90,000?

Currently the standard deduction limit is Rs 50,000. Many tax experts believe that this will now increase to Rs 90,000. That is, the government can increase this limit from Rs 50,000 to Rs 90,000 in the interim budget. If this happens, it can prove to be a big saving for taxpayers.

What is standard deduction?

Standard deduction is a flat deduction the salaried class can avail of from taxable income without showing any expenditure or saving. Its objective is to achieve parity between taxpayers who receive income through salaries and income from business. Last year, the government also added standard deduction to the new tax regime. At present, standard deduction is available in both the old tax regime and the new tax regime.

This is the history of standard deduction

Standard deduction was first introduced in India in 1974. According to the history of standard deduction, this deduction is given to salaried class and pensioners to cover their expenses. It was removed in 2004–2005 to simplify taxation. It was then re-introduced in the Union Budget in 2018 and fixed at Rs 40,000 for salary class employees and pensioners.

In the interim budget presented on 1 February 2019, the standard deduction limit was increased to Rs 50,000. However, this was limited to the old tax system. In Budget 2023, it was combined with the new tax regime. Standard deduction of Rs 50,000 was allowed in the new tax regime. Now this is available on both new and old tax regime.

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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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New tax regime may be applicable

According to the information received from the sources, the government wants to have a uniform tax system across the country, due to which it is believed that the implementation of the New Income Tax Regime can be announced this time.

Tax rates can be cut

In the Budget 2020-21, Finance Minister Nirmala Sitharaman announced a new tax regime, in which tax rates were reduced without exemptions and deductions. Let us tell you that in the assessment year 2021-22, about 5.8 crore people had filed taxes, but less than 5 percent of these people had adopted the new tax system. For this reason, the government can also announce a reduction in tax rates in this budget.

To make the income tax system popular, the Ministry of Finance is considering to cut its rates. Experts believe that there should be only one tax system in the country, in which taxpayers get exemption and it should be very simple.

Exemption is available in the old tax system

Taxpayers get many types of exemptions in the old tax system. In this, exemption is available including House Rent Allowance (HRA), Leave Travel Allowance (LTA) and many sections of the Income Tax Act, 1961. At the same time, many exemptions are available under section 80C including insurance, ELSS, provident fund, PPF.

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New tax regime may be applicable

According to the information received from the sources, the government wants to have a uniform tax system across the country, due to which it is believed that the New Income Tax Regime will be implemented this time. can be announced.

Tax rates may be cut In the budget 2020-21, Finance Minister Nirmala Sitharaman had announced a new tax regime, in which tax rates were reduced without exemptions and deductions. Let us tell you that in the assessment year 2021-22, about 5.8 crore people had filed taxes, but less than 5 percent of these people had adopted the new tax system. For this reason, the government can also announce a reduction in tax rates in this budget.

There should be only one tax system in the country. In order to make the income tax system popular, the Ministry of Finance is considering to cut its rates. Experts believe that there should be only one tax system in the country, in which taxpayers get exemption and it should be very simple.

Exemption is available in the old tax system Taxpayers get many types of exemptions in the old tax system. In this, exemption is available including House Rent Allowance (HRA), Leave Travel Allowance (LTA) and many sections of the Income Tax Act, 1961. At the same time, many exemptions are available under section 80C including insurance, ELSS, provident fund, PPF.

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