The Union Budget 2026 has brought a series of tax and investment-related changes that directly impact India’s middle-class taxpayers. While the government has focused on fiscal consolidation and long-term economic stability, several provisions announced in the Budget are expected to increase the financial burden on salaried individuals, small investors, and households.

From higher taxes on certain investments to changes in deductions and compliance norms, these measures may affect disposable income and savings decisions for millions of taxpayers. In this article, we take a closer look at seven key changes in Budget 2026 that are likely to influence the financial planning of the middle class in the coming year.

The analysis below is based on announcements made in the Union Budget 2026 and official government disclosures.

At a Glance

• Trading: F&O tax rose by up to 150%.

• Gold: Secondary gold bonds now face capital gains tax.

• Date: Most changes start on April 1, 2026.

Trading Costs: The F&O Tax Hike

The state wants to cool down risky stock bets. Therefore, the Securities Transaction Tax (STT) on futures went up. It moved from 0.02% to 0.05%. Specifically, the tax on options rose to 0.15%. This hike makes frequent trading much more expensive. Retail users will feel the pinch on every trade. Use a low-cost broker to save money.

Gold Bonds: No More Free Gains

Sovereign Gold Bonds (SGBs) used to be tax-free at maturity. Actually, that rule changed for bonds bought on the exchange. You only get tax-free gains if you buy directly from the state. Bonds from the secondary market now face a 12.5% tax. Finally, this removes a popular way to save tax. Investors should check their bond source. Direct buying is now the best path.

Pension Cuts: The Disability Shift

The 2026 Budget limits tax breaks for defense personnel. Specifically, disability pensions for retired staff are now taxable. Only those forced out by injury keep the break. Actually, staff who retire after full service must pay tax now. This move aims to stop the misuse of the law. It hits veterans who count on every rupee. Military families must review their tax plans.

Buybacks and Alcohol: Higher Upfront Fees

Share buybacks are now taxed like a sale of stock. Therefore, promoters pay up to 30% tax on these deals. The state also hiked the tax on liquor sales. In fact, the tax at source moved from 1% to 2%. This means distributors and shops pay more upfront. Finally, drinkers will see higher prices at the bar. Both stock and sin goods cost more now.

Investor Blow: Interest Deduction Ends

Investors often borrow money to buy mutual funds or stocks. Specifically, you could once use interest costs to lower your tax. Budget 2026 ends this specific deduction. Actually, you cannot use interest to offset dividend income anymore. This makes “leveraged” investing much less attractive. Small investors must use their own cash now. Post-tax returns will drop for many.

Coffee Tax: The Machine Duty Hike

Even your morning caffeine fix is at risk. Specifically, the state removed duty breaks on coffee machines. Basic customs duty on these machines is now 10%. Therefore, office cafes and shops face higher equipment costs. Most firms will pass this cost to the customer. Actually, your daily cup could cost a few rupees more. Small luxuies are getting dearer.

Human Insight: The Reality Check

Don’t bank on “long-term growth” to fix these immediate pains. The state claims these hikes stop “speculation,” but they mostly hurt small retail traders. Actually, big funds have ways to hedge these costs that you do not. Reality Check: The coffee machine tax seems small, but it shows the state is hunting for revenue everywhere. Finally, promoters will likely stop buybacks and keep the cash. This could hurt the stock price for normal owners. Be wary of “simplified” tax acts.

Related News:

• UP Property Alert: Mandatory Aadhaar Verification Starts February 1
• No 8th Pay Commission Hike in Budget 2026: The Hard Truth
• Sunetra Pawar Makes History: Maharashtra’s First Woman Deputy CM

The post Budget 2026: 7 Tax Changes That Are Impacting Middle-Class Taxpayers first appeared on Rightsofemployees.com.

Although the new tax regime has lower tax rates, it has removed many popular exemptions and deductions such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), interest on home loan, Section 80C, etc. Still, taxpayers can avail three major exemptions. Usually people are aware of only one and are less aware of the other two.

1. Standard Deduction

The benefit of standard deduction is available in the new tax regime for salaried employees and pensioners. This deduction was ₹ 50,000 for FY 2023-24, which has been increased to ₹ 75,000 from FY 2024-25. This change will help taxpayers reduce their taxable income, thereby reducing their tax liability.

2. Employer’s contribution to National Pension System (NPS)

Under the new tax regime, tax exemption is available on contributions made by the employer to the National Pension System (NPS). This exemption is given under section 80CCD(2). However, there is no exemption on contributions made by the employee himself. The employer’s contribution can be up to 10% of the employee’s basic salary and dearness allowance, which is tax free.

3. Gratuity

The gratuity received at the time of retirement is tax free even in the new tax regime. This exemption is provided under section 10(10) of the Income Tax Act. For government employees, the entire gratuity amount is tax free, while for non-government employees, gratuity up to a maximum of ₹20 lakh is tax free.

Apart from this, tax exemption is also available under section 10(10C) on the amount received under Voluntary Retirement Scheme (VRS). Also, the benefit of exemption under section 10(10AA) on leave encashment at the time of retirement is also available in the new tax regime.

Related Articles:_

• FD interest rates: These 6 banks offer highest interest across these tenures. Check here
• FASTag Rule Change: Drivers will not face any problem due to the new FASTag rule: NHAI
• Delhi Metro users to get faster internet connectivity underground
• WhatsApp banned more than 80 lakh Indian accounts in a month! Know the reason
• 8th Pay Commission: Basic salary doubled! Know how much central government employees can earn

The post Standard deduction: There are 3 deductions available in the new tax regime, check all details first appeared on Rightsofemployees.com.

Let us tell you that these changes will come into effect from April 1, 2025, which means that when you file your tax return in July 2025 or if you file late or in June (if you file early), then these changes will not be applicable. In July 2025, taxpayers will file tax returns for the financial year 2024-25 in which the provisions of the Finance Act 2024 will be applicable.

Let us tell you that in the Budget 2024 announced on July 23 last year, Finance Minister Nirmala Sitharaman announced new tax slab rates and also increased the limit of standard deduction under the new tax system. These changes will naturally take effect when you file your tax return in July 2025. Let us tell you what these changes are like….

The post ITR filing: Want to claim zero tax for income upto ₹12 lakh? Need to wait till.. first appeared on Rightsofemployees.com.

Who can take advantage

Salaried employees and pensioners get the facility of getting tax exemption through standard deduction. If you choose the new tax slab to pay income tax, then you will get the benefit of standard deduction of Rs 75,000. On the other hand, salaried taxpayers get only a standard deduction of Rs 50,000 if they choose the old tax regime.

Understand with an example

Suppose you are a salaried person and your annual income is 13 lakhs and if you choose the new tax regime, then the standard deduction will be reduced by Rs 75,000. Now Rs 12,25,000 will be left, tax will be levied on it according to the slab. On the other hand, if your income is Rs 12,75,000, then according to the new tax regime, you will not have to pay income tax because income up to 12 lakhs is tax free and you will get the benefit of standard deduction of Rs 75,000. On the other hand, if you choose the old tax regime on an annual income of 13,00,000, then you will get the benefit of standard deduction of up to Rs 50,000 in the total package. In such a situation, your tax will be calculated on Rs 12,50000 instead of 13 lakhs.

After 2005, it was implemented again in 2018

In India, there was a provision of standard deduction for salaried persons before the year 2005, but it was discontinued in the budget of that year. Instead, a provision was made for deduction of Rs 19,200 in the form of transport allowance and Rs 15,000 in the form of medical allowance in some special items. But the employees were not satisfied with this. The employees believed that businessmen and consultants claim exemptions by showing many types of expenses, but salaried people have very few options. To address this complaint of the employees, the government again implemented standard deduction in the budget of the year 2018. But the exemption in the form of transport allowance and medical reimbursement was abolished.

What is the benefit of standard deduction

Standard deduction is better for employees than the exemptions in the form of transport allowance and medical reimbursement because there was more paperwork to get the exemption of transport allowance and medical reimbursement. Whereas through standard deduction, the amount is deducted directly from the gross salary of the salaried person and after this the taxable income is determined on the remaining salary.

Related Articles:-

• UPI Rule Change Alert 2025: Key Changes On UPI Transaction IDs
• Train Cancelled: Indian Railways has cancelled many trains on these routes till March, see the list
• Bank FD TDS Limit Hike : TDS limit on interest earned from bank FD increased from Rs 40,000 – Key Details
• Air India announced ‘Namaste World’ sale to offer domestic airfares from Rs 1,499
• Public Holiday: Govt declared holiday in all schools, colleges, government and private offices on day after tomorrow – Details Here

The post Standard Deduction: What is standard deduction and who gets its benefit? first appeared on Rightsofemployees.com.

Finance Minister Nirmala Sitharaman has given a big relief to the middle class. Now income up to Rs 12 lakh will be out of the scope of income tax. The Finance Minister said in the budget on direct tax that the spirit of justice will be given priority in the new Income Tax Bill.

Up to how much taxable income will we not have to pay tax now?

The Finance Minister said that there will be no income tax on income up to Rs 12 lakh. When standard deduction is also added to this, there will be no tax on taxable income of Rs 12.75 lakh for salaried people. The Finance Minister has said that this decision will help in reducing taxes on the middle class to a great extent. They will have the opportunity to leave more money, increase domestic consumption, savings and investment.

The Finance Minister has announced that changes are being made in the income tax slabs and rates to benefit all taxpayers. The Finance Minister has said that under the new tax system, there will be zero income tax up to an income of Rs 12 lakh. The government has paid special attention to the middle class and has improved the personal income tax system.

What did the Finance Minister announce on TDS?

The Finance Minister has said in his budget speech that changes will be made in the TDS limit to bring uniformity in it. The TDS exemption limit for senior citizens will be increased from Rs 50 thousand to Rs 1 lakh. The TDS exemption limit on rental income will be increased to Rs 6 lakh. According to the Finance Minister, the provisions of higher TDS will remain applicable in non-PAN cases. The limit for filing updated returns has been increased from two years to four years. 

What is the benefit to the elderly in case of TDS?

• What did you find? 

Tax exemption on interest

• Who got it?

to senior citizens

• How much benefit?

1. Earlier, senior citizens were not required to pay TDS on interest income up to Rs 50,000. 

2. Now TDS will not be levied on interest up to Rs 1 lakh.

What are the updates related to TDS on rent

• What did you find?

1. Earlier, TDS was not levied on rent income up to Rs 2.4 lakh.
2. Now TDS will not be levied on income up to Rs 6 lakh from rent.

• Who benefits? 

Small taxpayers who receive rental income in small amounts.

How much income was tax free before the budget?

According to the Finance Minister’s Budget 2024, earlier if the annual income of a taxpayer was Rs 7 lakh 75 thousand, then after deducting the standard deduction of Rs 75,000, his income became Rs 7 lakh annually. In such a situation, he did not have to pay any tax. This means that if a person’s monthly salary was around Rs 64000 or Rs 64500, then his income was tax free under the new tax system.

Related Articles:-

Public Holiday: Govt declared Holiday in all schools, colleges and government offices tomorrow – Details Here

Senior Citizens Tax Deduction: Senior citizens will get double discount on FD, no need to file ITR if earning up to 10 lakh

Income Tax Slab Change : Entire tax slab has changed in the new regime – check new tax slab

The post Standard deduction: No tax on taxable income of Rs 12.75 lakh with standard deduction – Key Details first appeared on Rightsofemployees.com.

It is being said that the government may announce some exemptions in the new tax regime. Experts are demanding to increase HRA, Section 80C tax deduction and standard deduction of Rs 1 lakh in Budget 2025.

Standard Deduction Limit

A new tax system was introduced in the Union Budget 2020, which aims to simplify the tax infrastructure. However, no exemption is given in this. Only standard deduction is available. The benefit of standard deduction is also given under the old tax system. Currently, the standard deduction in the new tax system is Rs 75 thousand, which can be increased to Rs 1 lakh. At the same time, the standard deduction in the old tax system is Rs 50 thousand. This can also be increased to Rs 1 lakh.

Limit of Section 80C

Under Section 80C of the Income Tax Act, 1961, taxpayers are given tax exemption on investment up to Rs 1.5 lakh. In such a situation, now there is a demand to increase its limit, which has not changed for a long time. There is a demand to increase it to Rs 2 lakh. Currently, investors can claim exemption by investing in places like PPF, LIC, PF and home loan.

Home loan

individuals are eligible to claim deduction on payments made towards the principal amount of the home loan under section 80EE. The deduction for home loan interest payment can be up to Rs 50,000 per financial year. There is a demand to increase this in the budget as well.

HRA exemption

is also a common demand of taxpayers that HRA exemption should be included in the new tax system. Currently, this benefit is applicable only under the old tax system, which leads to tax saving. Experts believe that the inclusion of this exemption will be of great help to people.

Related Articles:-

PAN card is now valid for Identity verification, know what will be your benefit

UPI users alert! New rules for UPI payments are being implemented from 1st February, check immediately

Ola, Uber, Rapido taxis rules: Now it is necessary to get permit for these bike taxis. Check Details

The post Budget 2025: HRA, 80C and standard deduction…These big announcements can be made in the budget first appeared on Rightsofemployees.com.

The countdown for the Union Budget has begun. On Saturday, February 1, Finance Minister Nirmala Sitharaman will present the general budget in Parliament. Before this, taxpayers have high expectations from the government regarding income tax exemption. Along with reduction in income tax, there is a demand to make the tax slab more flexible and increase the standard deduction.

Reports suggest that Finance Minister Nirmala Sitharaman may announce major changes in the new tax regime by increasing the basic exemption limit from Rs 3 lakh to Rs 10 lakh. Apart from this, a new tax slab of 25 percent can be introduced for income between Rs 15 lakh and Rs 20 lakh.

At present, those earning more than Rs 15 lakh have to pay tax at a slab rate of 30 per cent. If a new slab is introduced in Budget 2025, the tax rate of 30 per cent will be applicable on income above Rs 20 lakh.

Related Articles:-

• 8th Pay Commission: Basic salary may reach Rs.51480 according to fitment factor
• Budget 2025: Govt can raise Limit of Kisan Credit Card (KCC) up to 5 lakh rupee – Details Here
• MobiKwik launches e-Rupee, you can make payment through UPI, daily limit of ₹ 50000
• SBI Har Ghar Lakhpati: Do you want 5 lakhs in 3 years? You will have to invest this much every month
• Hyderogen Train Update: India’s first hydrogen train may start running this month, Check Details

The post Budget 2025 Expectations: Zero tax on income of 10 lakhs, standard deduction will also increase first appeared on Rightsofemployees.com.

Whether the limit of standard deduction is increased or the limit of 80C is increased. Here we are telling you that in the last budget 2024-25, the government had made many big announcements related to income tax, which is important for all taxpayers to know.

1. Announcement of new tax slab

In the last budget, the government changed the tax slabs in the new tax system to provide relief to taxpayers. The new tax slabs were as follows:

• Rs 0-3 lakh: 0% tax
• Rs 3-7 lakh: 5%
• Rs 7-10 lakh: 10%
• Rs 10-12 lakh: 15%
• Rs 12-15 lakh: 20%
• Rs 15 lakh and above: 30%

Due to these new slabs, taxpayers can save up to Rs 17,500 annually.

2. Increase in standard deduction

The limit of standard deduction has been increased from Rs 50,000 to Rs 75,000.

The deduction limit for family pensioners has been increased from Rs 15,000 to Rs 25,000. This will provide huge tax relief to salaried and retired employees.

3. Deduction in NPS

The deduction limit on employer’s contribution to the National Pension System (NPS) has been increased from 10% to 14%. This move will promote savings in retirement funds.

4. Changes in capital gains tax

Short Term Capital Gains Tax (STCG) rate increased from 15% to 20%.

The rate of Long Term Capital Gains Tax (LTCG) was increased from 10% to 12.5%.

LTCG exemption limit on equity investments increased from Rs 1 lakh to Rs 1.25 lakh.

The purpose of this change is to encourage investors to invest for a long time.

5. TCS on luxury goods

Tax Collection at Source (TCS) was implemented on luxury goods worth more than Rs 10 lakh. This rule came into effect from January 1, 2025. Its purpose is to keep an eye on expensive transactions and prevent tax evasion. Through these changes, the government has tried to give relief to taxpayers as well as strengthen tax collection.

Related Articles:-

• These vehicle drivers will not get petrol and diesel, DC issued orders…
• New flights Service from Indore to Bangalore are going to start from this day, see schedule
• Weather Latest Update: Alert issued for 17 districts, drizzle will occur in many districts
• UPI Safety Tips: These mistakes related to UPI can cause loss of lakhs of rupees, Key Details
• Central government is preparing to bring changes in the ‘Enemy Property Act’ – Key Details

The post Taxpayers Update: 5 major rules related to income tax have been changed – Key Details Inside first appeared on Rightsofemployees.com.

However, no changes have been made in the old tax regime. In the old regime, taxpayers get the benefit of various deductions and exemptions. So, if your annual income is Rs 10 lakh, which regime will be better for you?

In the old tax regime, taxpayers could avail benefits under various sections like 80C (up to Rs 1.5 lakh), 80D (health insurance premium) and standard deduction (Rs 50,000).

Old tax regime

Total deduction: ₹2,25,000
Taxable income: ₹10,00,000 – ₹2,25,000 = ₹7,75,000

Tax calculation:

Up to ₹2.5 lakh: Nil
₹2.5 lakh to ₹5 lakh: 5% = ₹12,500
₹5 lakh to ₹7.75 lakh: 20% = ₹55,000
Total tax: ₹67,500
Cess (4%): ₹2,600
Total tax payable: ₹70,100

New tax regime

The new tax regime has lower tax slabs but there are no deductions and exemptions.
Taxable income: ₹10,00,000 – ₹75,000 = ₹9,25,000

Tax calculation:

Up to ₹3 lakh: Nil
₹3 lakh to ₹7 lakh: 5% = ₹20,000
₹7 lakh to ₹9.25 lakh: 10% = ₹22,500
Total tax: ₹42,500
Cess (4%): ₹1,700
Total tax payable: ₹44,200

Comparison and Conclusion

Old regime tax: ₹70,100
New regime tax: ₹44,200

If your annual income is ₹10 lakh, the new tax regime reduces the tax liability by ₹25,900. However, if you are able to avail maximum deductions available in the old regime, it can be beneficial for you. Taxpayers should choose the right option based on their income, expenses and investment plans. The new system is simpler, but the old system offers the benefit of more exemptions.

Related Articles:-

IMD Latest Report: IMD issues heavy rain alerts for THESE 11 states, cold wave looms

Indian Railways has canceled these trains on this route till December 1, check the full list

Cyber Security New Rules: Government notifies telecom cyber security rules, know all new rules of DoT

The post Best tax regime: Which tax regime is better for income of Rs 10 lakh? first appeared on Rightsofemployees.com.

The government had given this relief in the form of standard deduction in the New Tax Regime. However, the salaried class has been demanding relief in the Old Tax Regime for a long time. The process of preparations has started from the Finance Ministry for the budget for the financial year 2025. Recently, the Finance Minister had a meeting with the officials regarding the preparations.

What will be special for the middle class in the budget?

The budget for the financial year 2025 will be presented this time on February 1, 2025. This will be the eighth budget presented by Finance Minister Nirmala Sitharaman. What will be special for the middle class in this budget? There is a discussion going on in the Finance Ministry regarding this. In the news published in Dainik Jagran regarding this, citing sources, it has been claimed that in the budget to be presented in February next year, the government can again give relief in income tax to the middle class. Let us tell you that in the middle class, the number of salaried class who pay income tax is the highest.

There is a consideration to increase the limit of standard deduction.

The news published in the newspaper claimed that this time, to give relief to the salaried class, the Finance Ministry is considering increasing the limit of standard deduction under the New Tax Regime of Income Tax. In the current financial year, under the New Tax Regime, the salaried class gets the benefit of standard deduction of Rs 75,000. Apart from this, those earning up to Rs 7 lakh annually do not have to pay any tax under the New Tax Regime.

There will be no relief in the old regime!

Sources claim that in the budget to be presented on 1 February 2025, the amount of standard deduction for the salaried class can be increased from Rs 75000 to one lakh. Sources also claimed that the government will give any kind of relief in income tax only under the new tax regime. Actually, it is being promoted by the government and the old tax regime is being discouraged. This has been indicated by the Finance Ministry on many occasions before.

Out of the eight crore income tax returns filed in the financial year 2023-24, the number of ITRs filed by those earning 5 to 10 lakh annually was 2.79 crore. Apart from this, those earning Rs 10-20 lakh filed 89 lakh ITRs. This simply means that if the government decides to give relief in income tax, then relief will be given keeping in mind about three crore taxpayers.

Related Articles:-

PAN-Aadhaar Link: If PAN card is not linked to Aadhaar, these important tasks may get stuck

PF Withdrawal Rules 2024: Can you withdraw money from PF to buy a new house? Know the rules

DMRC’s special initiative, now you can buy tickets for monuments using mobile app

The post Standard Deduction: Good news! Govt prepares to increase standard deduction to so many lakhs! first appeared on Rightsofemployees.com.

After this change, now under the New Tax Regime, those earning Rs 7.75 lakh annually will not have to pay even a single rupee tax, but if your salary is Rs 10 lakh, then let us know how you can save tax on your entire income and will not have to pay even a single rupee tax.

You won’t have to pay a single rupee tax on earning 10 lakhs

If you want to save the entire amount on earning 10 lakhs, then you will have to leave the new tax regime and choose the option of old tax regime, in which many types of exemptions will have to be claimed, but if you do not claim tax exemption, then according to the tax slab under the old tax regime, you will have to pay 20 percent tax. However, if you claim tax exemption, then you can save the entire tax on earning 10 lakhs.

Also Read: Public Special Scheme: Deposit only ₹ 100 daily, you will get a return of up to 8 lakhs after so many years

How can you save tax in the old tax regime? 

• Under the old tax regime, a rebate of up to Rs 50,000 is available as standard deduction. In such a situation, now tax will be levied on Rs 9.50 lakh. 
• By investing in schemes like PPF, EPF, ELSS, NSC, you can save tax of Rs 1.5 lakh under Income Tax Section 80C. Now you will have to pay tax on Rs 8 lakh. 
• If you invest up to Rs 50,000 annually in the National Pension System (NPS), then under section 80CCD (1B) you are given an extra tax exemption of Rs 50,000. Now if you deduct another Rs 50,000, then tax will be levied on Rs 7.50 lakh. 
• If you have taken a home loan, you can save up to Rs 2 lakh on the interest under Section 24B of Income Tax. If you subtract another Rs 2 lakh from Rs 7.50 lakh, the total tax income will be Rs 5.50 lakh. 
• You can save tax up to Rs 25,000 by taking a medical policy under section 80D of income tax. This health insurance should have your name, your wife’s name and your children’s name. Apart from this, if you buy health insurance in the name of your parents, you can get an extra deduction of up to Rs 50,000. 
• In such a situation, if you subtract 75 thousand from 5.50 lakh, then the total tax liability will be 4.75 lakh, which will be below the old tax regime limit of Rs 5 lakh. This means that you will not have to pay a single rupee tax on an annual income of 10 lakh. 

How much tax will have to be paid on earning 10 lakhs in the new tax regime?

Even though Finance Minister Nirmala Sitharaman has changed the tax slab in the new tax regime and increased the standard deduction, you will still have to pay tax on earning 10 lakhs. You cannot avail tax exemption by investing under the new tax regime. In such a situation, let us know how much tax will have to be paid if your income is Rs 10 lakh annually and you choose the new tax regime? 

The post Old Tax Regime: No tax to be paid on income of Rs 10 lakh – Details here first appeared on Rightsofemployees.com.

At the same time, the Finance Minister has increased the long term capital gain tax and short term capital gain tax on all financial and non-financial assets. Now LTCG will be taxed at the rate of 12.5%. Additionally, the exemption limit for capital gains will be fixed at Rs 1.25 lakh per annum. At the same time, STCG will be taxed at the rate of 20 percent.

Finance Minister Nirmala Sitharaman has announced a better review of the Income Tax Act 1961. She said that this will reduce disputes and litigation, she said that it is proposed to complete it in 6 months.

Also Read: Property Tips: House or land, whose registration costs more money?

New Tax Slab in Budget 2024-25

• 0-3 lakh rupees: 0
• Rs 3-7 lakh: 5%
• 7-10 lakhs: 10%
• Rs 10-12 lakh: 15%
• Rs 12-15 lakh: 20%
• Above Rs.15 lakh: 30%

The post Income Tax Slab: Standard deduction increased from Rs 50,000 to Rs 75,000- check details first appeared on Rightsofemployees.com.

Tax exemption limit on savings account interest may be Rs 25000

Finance Minister Nirmala Sitharaman is going to present Budget 2024 shortly. The government may increase the tax exemption limit on savings account interest to Rs 25,000.

Income Tax Budget 2024 LIVE: Income tax slab in old tax regime

Currently, under the old income tax regime, taxpayers are not required to pay any tax on income up to Rs 2.5 lakh.

– There is a tax rate of 5% on income from Rs 2.5 lakh to Rs 5 lakh.

– There is a tax rate of 20% on income from Rs 5 lakh to Rs 10 lakh.

– There is a tax rate of 30% on income above Rs 10 lakh.

Tax exemption limit may increase in 80C

Finance Minister Nirmala Sitharaman may increase the scope of exemption under section 80C in her seventh budget. Currently, taxpayers get exemption of up to Rs 1.5 lakh under 80C. The deduction limit can also be increased under 80D. Currently, individuals get the benefit of exemption of Rs 25000 and senior citizens get the benefit of exemption of up to Rs 50000 under 80D.

NPS may come in the new income tax regime

There may also be announcements in Budget 2024 to promote the National Pension System (NPS). Tax benefits can be given on employee contributions made to NPS in the new income tax regime.

Taxpayers are expecting big relief from FM

In Budget 2024, taxpayers are hoping that a 30% income tax rate can be introduced for income and salary levels above Rs 20 lakh. If the Finance Minister makes an announcement related to this in Budget 2024, then the middle class will have more cash in their hands.

Can taxpayers get double happiness?

Can Finance Minister Nirmala Sitharaman increase both the standard deduction limit and the basis exemption limit in Budget 2024? Experts say that some populist announcements can be made in Budget 2024. However, taxpayers should not expect much change.

Basic exemption limit may increase in the new tax regime

The basic exemption limit can be increased in the new income tax regime. To make the new tax regime attractive, the basic exemption limit was increased to Rs 3 lakh in Budget 2023, which was earlier Rs 2.5 lakh. Experts hope that in Budget 2024, the basic exemption limit in the new tax regime can be increased by another Rs 50,000 to Rs 3.5 lakh.

Standard deduction is currently Rs 50,000 in new and old tax regime

Currently, taxpayers in both the new and old income tax regimes get a standard deduction of Rs 50,000. Standard deduction is a flat deduction available to the salaried class. It was last revised in the year 2019.

The post Income Tax Budget 2024: Standard deduction limit may be Rs 1,00,000 first appeared on Rightsofemployees.com.

Like every time, in this budget too, the eyes of taxpayers and working people will be on the changes in the income tax slab, increase in standard deduction and more relief in housing loan interest and section 80C. However, where and how much relief will Finance Minister Nirmala Sitharaman give. It will be clear after 11 o’clock. It is expected that the government can make taxpayers happy by changing the income tax slab, as well as increase the standard deduction.

Increase in income tax limit possible: There is a possibility that under the new tax system, the basic exemption limit can be increased from Rs 3 lakh to Rs 5 lakh. This decision will provide great relief to low-income group taxpayers.

Changes in the new tax regime: The government can make further changes in the new tax system to make it more attractive. This can include adjustments in the tax slabs or additional deductions.

Also Read: Budget Expectation: Finance Minister can make this announcement for railway passengers

Increase in standard deduction: In order to provide great relief to the working class, the government can increase the standard deduction limit. Currently, this limit is Rs 50,000, which is expected to be increased to Rs 1 lakh.

Section 80c limit will increase: In the old tax regime, taxpayers get a rebate of up to Rs 1.50 lakh under section 80c. It is believed that in the budget, this tax rebate can be increased from Rs 1.5 lakh to Rs 2 lakh.

Increase in standard deduction: In order to provide great relief to the working class, the government can increase the standard deduction limit. Currently, this limit is Rs 50,000, which is expected to be increased to Rs 1 lakh.

Section 80c limit will increase: In the old tax regime, taxpayers get a rebate of up to Rs 1.50 lakh under section 80c. It is believed that in the budget, this tax rebate can be increased from Rs 1.5 lakh to Rs 2 lakh.

Stocks under Rs 10 that give strong returns
Stocks under Rs 10 that give strong returnsSee ahead…

More tax exemption on home loan interest: Under Section 24(b) of the Income Tax Act, tax exemption can be claimed on interest up to Rs 2 lakh on home loan. However, there is a demand to increase this deduction to Rs 4 lakh. At the same time, some real estate experts have demanded to increase this limit to Rs 5 lakh. This will improve the property market as well as the common man.

The post Income Tax Slab: Important announcement possible on standard deduction, housing loan interest first appeared on Rightsofemployees.com.

After the Modi government came to power for the third consecutive time, the expectations of individual taxpayers have increased significantly from the full budget to be presented on July 23, 2024. This time the budget is expected to focus on the middle class. In this budget, it is expected that many big announcements can be made by the government to provide relief to the National Pension Scheme (NPS) members. In this budget, the tax exemption limit on NPS contribution can be increased to 12 percent, currently it is 10 percent.

Benefit of deduction under the old regime

Investment in NPS (National Pension Scheme) gets the benefit of deduction of income tax under the old regime. It is a saving scheme run by the government to provide security in old age. It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). The money deposited in it and the interest received on it is tax free. But a little tax is levied while withdrawing the money. Now PFRDA has recommended increasing the tax exemption. The regulator says that in terms of tax, there should be equal opportunities for companies and employers contributing to NPS just like EPFO, right now there is inequality in it.

Also Read: Bank Holiday: Banks will remain closed in this state of the country today, check the list of RBI holidays

Facility to deposit up to 10% of salary

Under NPS (National Pension Scheme), salaried class people can deposit up to 10% of their salary. Businessmen can deposit up to 20% of their total earnings. This is a benefit available under section 80CCD(1) of the Income Tax Act. In the old tax regime, this can be clubbed with the limit of Rs 1.5 lakh available under section 80C. If you are in the old tax regime, you can additionally avail deduction of up to Rs 50,000 on the amount voluntarily deposited in NPS. This is available under section 80CCD(1B) of the Income Tax Act.

Two benefits of increasing the limit of NPS

In Budget 2024, the additional deduction of up to Rs 50,000 that salaried taxpayers get for voluntary contribution to NPS is available only under the old tax regime. It is expected that the government will implement this deduction in the new tax system as well. There will be two benefits of this. First, taxpayers will be able to get the benefit of additional deduction even in the new tax regime. Second, along with the new tax regime, there will be more investment in retirement schemes as well.

If the contribution increases, the in-hand salary will be less!

Currently, deduction regarding employer’s contribution (maximum 10%) is given under both the old and new tax regimes. The government can consider increasing this limit to 12%. If this happens, it will be like a discount of up to 12% in PF contribution. This can benefit all salaried class taxpayers. However, due to increase in employer’s contribution, the amount of salary received by the employee may be less. Efforts are now being made to make the new tax regime the preferred tax regime. In this, you get a lower tax rate, but for this you have to give up the exemptions on some things.

Apart from this, the government can consider increasing the limit of standard deduction of Rs 50,000 available under the new tax regime to Rs 75,000. This will benefit the salaried class, irrespective of which tax regime they have selected. In view of inflation and rising prices, it can be implemented by the government in Budget 2024. To make the new tax regime more attractive, the government can consider some changes.

The post Budget 2024 Expectations: Limit of tax exemption and standard deduction in NPS may increase first appeared on Rightsofemployees.com.

What is standard deduction?

Standard deduction is a fixed amount that taxpayers can deduct from their taxable income without having to provide proof of expenses. It reduces the taxable income and hence reduces the overall tax liability.

Also Read: Jio Plans Price Hike: All these new increased rates of Jio plans will be applicable from tomorrow, July 3, 2024

Current proposals and past budget measures

Finance Minister Nirmala Sitharaman had proposed a standard deduction of Rs 50,000 for salaried and pensioners under the new tax regime in the budget for the last financial year. Increasing the limit of standard deduction can reduce the taxable income of all salaried taxpayers. The move is aimed at providing relief to people from rising expenses and financial challenges.

For the financial year ending March 31, 2024, the last date for individuals to file their income tax returns (ITR) is July 31, 2024. However, the process of filing ITR can be a bit daunting, especially for individual taxpayers who find it difficult to understand the various sections and things required to file their ITR.

The post Budget 2024: Standard deduction limit can be increased to Rs 1 lakh in the budget first appeared on Rightsofemployees.com.

At the same time, the income tax payer who chooses the new tax system does not get the benefit of most of the tax exemptions and deductions. An attempt has been made to make the annual income of up to Rs 7 lakh tax free for those adopting the new income tax regime. Apart from this, there are some deductions which salaried employees can also get in the new tax regime.

Income tax payers choosing the new tax system can definitely avail the benefit of two deductions. One is standard deduction and the other is deduction on the contribution made by the employer in NPS. By availing the benefit of both these deductions, a salaried person can significantly reduce his tax liability. If his total annual income is Rs 8 lakh then he will not have to pay even a single penny as income tax.

Standard deduction

Standard deduction is the deduction which is deducted from the income of the taxpayer and after that tax is calculated on the remaining income. Employed individuals get a tax deduction of up to Rs 50,000 as standard deduction, while family pensioners are given a tax deduction of Rs 15,000 as standard deduction.

Suppose the annual income of a working person is Rs 8 lakh. In such a situation, if you get the benefit of standard deduction up to Rs 50,000 in the total package, then its tax will be calculated on Rs 7,50,000 instead of Rs 8 lakh. No documents have to be submitted to avail this discount.

Income taxpayers who have adopted the new tax system can also now avail the benefit of standard deduction. While filing Income Tax Return or ITR, standard deduction is claimed under the head Income from salaries/pension under Section 16(ia) of the Income Tax Act. Family pension is kept under the head “Income from other sources” in ITR.

Deduction on amount deposited in NPS

Under the new tax regime, employed employees also get the benefit of standard deduction on the amount deposited in the National Pension System (NPS). To get this, certain conditions must be fulfilled. The first condition is that this amount in NPS should be deposited by the employer in the Tier-1 NPS account of his employee. Secondly, this amount should not be more than 10 percent of the salary of private sector employees.

For government employees this limit is 14 percent. Salary means the amount made by combining basic salary and dearness allowance. Employed people can avail the benefit of this deduction under Section 80CCD (2) of the Income Tax Act. This amount deposited in the NPS account will be mentioned in Part B of Form 16.

Income up to Rs 8 lakh can be tax free

After availing the benefit of both these deductions, the income of a working person earning Rs 8 per year can be tax free. After deducting Rs 50,000 as standard deduction from the annual income of Rs 8 lakh, his taxable income will be Rs 7.5 lakh. Now if the employer deposits Rs 50 thousand in the employee’s Tier-1 NPS account, then the taxable income will further reduce to Rs 7 lakh. On which no tax will have to be paid under the new tax regime.

The post New tax regime: Employees can also take advantage of these two deductions in the new tax regime. first appeared on Rightsofemployees.com.

This demand has increased even more when last year the government added the standard deduction with the new tax regime. It has been almost five years since the standard deduction was revised. The standard deduction was last changed in the year 2019.

Although the budget of year 2024 will be only an interim budget, still the middle class salary class is sitting with high expectations. It is expected that Finance Minister Nirmala Sitharaman may give some relaxation on some taxes. Will the standard deduction be increased by Rs 50,000 in Budget 2024?

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. At present, standard deduction is available in both the old tax regime and the new tax regime.

Standard deduction was introduced for the first time in the year 1974

Standard deduction was first introduced in India in 1974. As per the history of Standard Deduction, this deduction was available to salaried individuals and pensioners to cover some of their expenses. It was removed in 2004–2005 to simplify taxation. It was 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.

Why should the standard deduction be increased by Rs 50,000 in Budget 2024?

There are several reasons for increasing the standard deduction limit from Rs 50,000. Many tax experts believe that it needs to be increased from Rs 50,000 to Rs 1,00,000. People need to increase the standard deduction to cope with inflation and increase disposable income.

The post Standard deduction limit: Big relief to employed people, Standard deduction limit may increase to Rs 1,00,000, check details first appeared on Rightsofemployees.com.

After the arrival of Modi government in the country, many changes have come. Due to these changes, people in the country have also got many types of relief. At the same time, it is also very important for the people in the country to fill the income tax return. It is very important for those whose income is taxable to fill ITR. At the same time, this time a lot of exemption has also been given by the Modi government in the income tax return, through which people will also be helped in saving tax. Let’s know about it…

Tax free income

In Budget 2023, Finance Minister Nirmala Sitharaman announced that income up to Rs 7 lakh will be tax-free under the new system. However, concerns were expressed as to what would happen to taxpayers who were earning marginally above Rs 7 lakh. Regarding this, Sitharaman said that the government has taken note of such concerns and now income up to Rs 7.27 lakh has become tax-free due to the introduction of minor relief provisions under the new tax regime.

Standard Deduction

The finance minister said, “Under the new regime, no income tax will be payable on annual income up to Rs 7 lakh, which effectively increases to Rs 7.27 lakh with marginal relief provisions.” Apart from this, to make the new system attractive, a standard deduction of Rs 50,000 was announced in Budget 2023.

Exemption

Sitharaman said that now standard deduction of Rs 50,000 has also been started under the new income tax regime. Standard deduction facility is available to salaried employees. Apart from this, the exemption limit on medical expenses of senior citizens has been increased from Rs.30,000 to Rs.50,000. Also, life saving drugs and cancer drugs have been exempted from GST.

The post Standard Deduction: Finance Minister Big Announcement! got this exemption on Income Tax first appeared on Rightsofemployees.com.

While filing income tax return, you have to take care of very small things. You need to claim all the necessary deductions to reduce your taxable income. A standard deduction also exists for pensioners and individuals. So that you can reduce the amount of tax. Through standard deduction, a certain amount is reduced from the taxable income. Due to which your tax amount also reduces.

Standard deduction was stopped in the middle

Standard deduction was started in the year 1974 in India. But it was later closed. It was reintroduced in the 2018 Union Budget. Now it has been re-introduced for pensioners and salaried people. So that the tax liability is reduced. This time, in the financial year 2023-24, those who opt for the new tax regime will be given the benefit of this standard deduction.

How much is standard deduction

Standard deduction has been kept at fifty thousand rupees for the salaried. You can claim this even after the actual expenses incurred on medical allowance, transport allowance. Salaried include employees of private companies, government and non-profit organizations. Suppose your taxable income is Rs 100000 lakhs, then you can claim a deduction of Rs 50000 thousand. That is, now you will have to pay tax only on 50 thousand rupees. This deduction is not available to a self-employed person.

How to claim

You have to file your return on the Income Tax Department’s site. When you file ITR, then only you will have to enter the amount of standard deduction. That is, if you are also salaried, then you must take advantage of this standard deduction.

The post Standard Tax Deduction: You can save up to 50,000 taxable income with just one claim first appeared on Rightsofemployees.com.

If you file income tax return, keep one important thing in mind. Actually, while filing ITR, take care of Standard Deduction. Standard deduction is available to individuals and pensioners. Standard Deduction is a fixed amount that is allowed as a deduction from the taxable income of an individual. It helps in reducing the taxable income of individuals and provides relief from tax liability.

Standard Deduction

Standard Deduction was introduced in India in 1974, which was later discontinued. Union Budget 2018 reintroduced it and currently it is available for salaried individuals and pensioners. This deduction reduces the taxable income of the individual and hence his tax liability comes down. Standard deduction was applicable only for those individuals who opt for the old tax regime. However, from the current financial year (FY 2023-24) the benefit is given to those individuals who opt for the new tax regime.

Income Tax Standard Deduction FY 2023-24

The Standard Deduction for salaried individuals for the financial year 2023-2024 is Rs 50,000. This is a flat deduction which can be claimed irrespective of the actual expenses incurred on transport allowance and medical allowance. The Standard Deduction is available to all salaried individuals, including those employed by the government, private companies, or non-profit organizations.

Taxable Income

Standard Deduction is a tax benefit that can help you reduce your taxable income. For example, if your taxable income is Rs 100,000 and you claim standard deduction of Rs 50,000, your taxable income will be reduced by Rs 50,000. This would result in a tax saving of Rs 12,500 (assuming you are in the 25% tax bracket).

Who can claim standard deduction of Rs 50,000?

Individuals receiving salary or pension from government organization, private company or any other employer can claim standard deduction of Rs.50000.

Who is not eligible for standard deduction?

Standard deduction of Rs.50,000 or the amount of salary, whichever is less, is available to all salaried individuals and pensioners. Self-employed individuals are not eligible for standard deduction.

How to claim standard deduction?

To claim the standard deduction, you need to file your Income Tax Return (ITR) with the Income Tax Department. You can file your ITR online or offline. When you file your ITR, you will need to enter the amount of Standard Deduction that you are claiming. Standard deduction is a valuable tax benefit that can help reduce your taxable income. If you are a salaried individual, you should consider claiming standard deduction while filing your income tax return.

The post Standard Deduction: Do not forget to claim it while filing income tax return, there will be a benefit of Rs 50,000 first appeared on Rightsofemployees.com.

However, this benefit will be available only to those opting for the new tax regime. The Finance Minister has raised the income tax exemption limit to Rs 7 lakh in the new tax regime, which was earlier Rs 5 lakh. While under the old tax regime, income up to Rs 2.5 lakh was tax free.

However, in the old tax regime, there is a provision for Standard Deduction and many exemptions in other items. These benefits were not given in the new tax regime. But this time standard deduction has also been included in the new tax system. A taxpayer can claim up to Rs 50,000 for standard deduction, while every salaried individual with an income of Rs 15.5 lakh or more is entitled to Rs 52,500 as standard deduction. Under the new tax regime, the basic exemption limit has been increased to Rs 3 lakh.

What is standard deduction?

Standard deduction is the deduction that is deducted from the income of the income tax payer and after that tax is calculated on the remaining income. Salaried employees and pensioners are already getting the facility to avail tax exemption through standard deduction. Suppose the annual income of a person doing a job is Rs 8 lakh. In such a situation, if the benefit of standard deduction up to Rs 50,000 is available in the total package, then their tax will be calculated on Rs 7,50,000 instead of Rs 8 lakh.

Standard deduction was introduced in the budget of the year 2018. Earlier its limit was Rs 40,000, which was increased to Rs 50,000 the next year. The purpose of starting this is to give more money to the employees by giving them tax exemption.

Who can avail it Standard deduction can be availed by salaried employees and pensioners who have not opted for the new tax rules. There is a provision of lower tax rate in the new rules. Apart from this, pensioners taking pension are also entitled to get this deduction. But standard deduction is not available on family pension. This means that if any of his dependents is taking family pension after the death of an employee, then he is not entitled to this deduction or exemption.

No effect of change of job

Change of job has no effect on standard deduction exemption. Total salary here includes all the components of salary paid by the employer and all the taxable portion of all allowances and perks. Even if an employee changes his job during the year, he is entitled to get the benefit of standard deduction.

Income tax slabs

The number of income tax slabs has been reduced to 5. Announcing the new tax slab on personal income, Sitharaman said that those earning Rs 3 to 6 lakh annually will have to pay 5% tax. The rate of income tax will be 10% on income of 6 to 9 lakh rupees. Rs 9 lakh to Rs 12 lakh will be taxed at 15%, Rs 12 lakh to Rs 15 lakh at 20% and income above Rs 15 lakh will be taxed at 30%.

The post Income tax slabs: Taxpayers can get a discount of 50 thousand without doing anything in the New Tax Regime, know how first appeared on Rightsofemployees.com.

Finance Minister Nirmala Sitharaman in her budget speech had talked about giving the benefit of standard deduction to the employees adopting the new tax regime. 

He had said that now employees earning more than 15.5 lakhs will get a total tax benefit of Rs 52,500 (standard deduction Rs 50,000). Confusion had arisen because of Sitharaman’s statement that employees earning less than 15.5 lakhs would not get standard deduction? Now the Central Board of Direct Taxes (CBDT) has issued a clarification on this. CBDT said that the benefit of standard deduction will be available to all employees adopting the new tax regime, irrespective of their income.

Employees and pensioners adopting the old tax regime were already being given the benefit of standard deduction. At the same time, in the budget 2023, the Finance Minister had announced to give its benefits to the employees adopting the new tax system and also to the family pensioners. Employees will get a deduction of up to Rs 50,000, while family pensioners will be given a tax deduction of Rs 15,000 as standard deduction.

CBDT clarified the situation

CBDT Chairman Nitin Gupta told news agency PTI in the post-budget clarification that all salaried taxpayers will be given the benefit of standard deduction in the new system. Gupta said that in the budget speech, the Finance Minister had mentioned the income of 15.5 lakhs just to explain how much benefit would be available to those with this much income. This does not mean that only those earning above fifteen lakhs will get the benefit of standard deduction.

What is standard deduction?

Standard deduction is the deduction that is deducted from the income of the income tax payer and after that tax is calculated on the remaining income. Suppose the annual income of a person doing a job is Rs 8 lakh. In such a situation, if the benefit of standard deduction up to Rs 50,000 is available in the total package, then their tax will be calculated on Rs 7,50,000 instead of Rs 8 lakh. No paper has to be given to get this discount.

When will the new rule be applicable?

Under the new tax regime, the standard deduction benefit will be applicable from assessment year 2024-25, i.e. it can be availed after filing income tax returns after FY 2023-24.

The post Standard Deduction: Will all employees get the benefit of standard deduction? first appeared on Rightsofemployees.com.

Now it is clear that the focus of the government will be on the new regime of income tax. You should not be surprised if the government announces the closure of the old regime in the next few years. Apart from increasing the exemption limit, the Finance Minister has reduced the number of slabs. Income tax rates have been reduced. Not only this, he has also announced standard deduction for the people working in the new regime.

The Finance Minister has said that salaried people whose annual income is Rs 15.5 lakh or more will get a standard deduction of Rs 52,500 annually under the new tax regime. Earlier, no standard deduction was available in the new tax regime. Only people employed in the old tax regime get the benefit of standard deduction. It is Rs 50,000 per annum.

The standard deduction was introduced by the government in the Union Budget 2018. However, the transport allowance and medical reimbursement were withdrawn by the government instead. Till the financial year 2017-18, a taxpayer could claim Rs 19,200 as transport allowance.

He could also claim medical reimbursement of Rs 15,000 annually. For this, the working people had to submit the medical bill to the finance department of the company. Earlier the standard deduction was only Rs 40,000. Then in the interim budget 2019, it was increased to Rs 50,000. The concept of standard deduction is not new. The government used to give this deduction to the salaried class in the financial year 2004-05. Then it was scrapped.

On February 1, Finance Minister Nirmala Sitharaman has announced to give the benefit of standard deduction in the new income tax regime. Its purpose is to attract taxpayers towards the new tax regime. The government wants more and more taxpayers to use the new tax system instead of the old tax system. That is why the Finance Minister has said that now the new tax regime will be the default tax regime.

The post Standard deduction: Employed people will get standard deduction of Rs 52,500 in the new tax regime first appeared on Rightsofemployees.com.

Especially such taxpayers, who invest at the very last moment. They are looking for investment avenues for tax saving. Generally, there is no tax liability on annual income up to five lakh rupees. It has to pay tax on excess income. However, by choosing the investment option, taxpayers can get tax concession even on income of more than five lakh rupees. A taxpayer can also declare income up to Rs 10 lakh tax free.

Earning up to 2.5 lakh tax free

According to the Income Tax Rule, there is no tax liability on income up to 2.5 lakhs annually. There is a provision of 5% tax on income of Rs 2.5-5 lakh. Income tax is to be paid at 30% on income between 5 to 10 lakhs and 30% on income above 10 lakhs.

Suppose someone’s CTC is Rs 10 lakh. In this way, according to his annual income, he comes under the purview of 20 per cent tax slab. But if he wants, he will not have to pay even a single rupee as tax. For this, he has to choose all kinds of investment options. Then he can take advantage of exemption in income tax.

Standard deduction

Income tax rules clearly state that up to Rs 50,000 is available as standard deduction. So deduct this amount from your earning of Rs 10 lakhs, then it will be Rs (10,00,000-50,000=9,50,000).

Saving under 80C

After this, you can save tax of Rs 1.5 lakh under 80C. Saving schemes like EPF, PPF, ELSS, NSC come under this. You can get tax exemption by investing in them. Apart from this, you can also take tax exemption in the form of tuition fees for two children. Now deducting Rs 1,50,000 from Rs 9,50,000, then this amount will come to the tax net of Rs 8 lakh.

Home loan

Home loan borrowers can save an additional tax of Rs 2 lakh. Under section 24B of Income Tax, the home loan borrower gets tax exemption on the interest of two lakhs. You also deduct this from your annual income. (8,00,000-2,00,000= 6,00,000). In this way, now your income of Rs 6 lakh will come under the ambit of tax.

National Pension System

If you separately invest up to Rs 50,000 annually in the National Pension System (NPS), then under section 80CCD (1B) you can save an additional Rs 50,000 in income tax. (6,00,000-50,000 = 5,50,000). In this way, now the income of Rs 5.5 lakh will be taxable.

Health policy

You can save tax up to Rs 25,000 by taking a medical policy under section 80D of income tax. You, your wife and children should be named in this health insurance. Apart from this, if your parents are senior citizens, then you can get an additional discount of up to Rs 50,000 by purchasing health insurance in their name. (5,50,000- 75,000 = Rs.4,75,000). In this way, your income of Rs 10 lakh is now out of the purview of tax liability.

The income tax rules clearly state that the tax on an income of Rs 5 lakh is Rs 12,500 (5% of Rs 2.5 lakh). In this case, a rebate of Rs 12, 500 is available under Income Tax Section 87A. Then you choose the option of investment, then you will not have to pay tax of even a single rupee on the income of Rs 10 lakh.

The post Income Tax Rule: Income up to Rs 10 lakh can be tax free, if you adopt this method, know the all details here first appeared on Rightsofemployees.com.

The government can adopt some different methods to provide relief to the middle class people from inflation. For this, experts are also expressing the hope that these 5 announcements will be made in the budget. Maximum income tax comes from the salaried class only. In such a situation, even if the Finance Minister announces an increase in the tax limit, it will not be surprising. Apart from this, the standard deduction is also expected to increase.

Tax limit will increase

Inflation is increasing day by day. In such a situation, the cost of living is also increasing. In such a situation, the government can give income tax exemption of five lakh rupees to income tax payers under the new tax system. At present, 5% tax has to be paid on income of Rs 2.5 to Rs 5 lakh and 20% tax on income of Rs 5 to 7.5 lakh.

Standard deduction will change

The salaried class can avail exemption of Rs 50,000 under standard deduction every year. It is believed that the government can make changes in section 16 (ia) of income tax. It is expected that the limit of this standard deduction can be increased from Rs 50,000 to Rs 75,000.

Exemption will be available in 80C

Under Section 80C of the Income Tax Act, taxpayers can get tax exemption by investing an amount of Rs 1.5 lakh. Taxpayers have been demanding to increase this limit for a long time. If the government takes a decision on this matter in this budget, then taxpayers are going to get a big relief. This investment can be done in EPF, PPF, ELSS, NSC, NPS, Bank FD.

Invest for retirement

Employed people always invest in retirement plans. In such a situation, the government can increase the limit of tax exemption in this also. Experts are of the opinion that the government can increase this limit to one lakh rupees under section 80CCD (1B) of the Income Tax Act.

Health Insurance

At present, there is a rebate of Rs 25 thousand under the health insurance claim. It is expected that in this budget the government will increase it to 50 thousand rupees and for the elderly it can be increased from 50 thousand to 75 thousand rupees.

The post Standard Deduction Increase: Government will benefit the salaried class in these 5 ways, standard deduction will increase! first appeared on Rightsofemployees.com.

The reason for this is also that this is the last full budget of the government before the elections. In such a situation, it is expected that the Finance Minister will give some relief to the employed people in view of the rising inflation rate after the pandemic.

Tax expert recommended for this time’s budget, tax expert has recommended to increase the limit of standard deduction for the job profession. Experts say that the Finance Ministry should give tax rebate for the working class. In fact, it has become necessary to give relief due to the increase in expenditure on transport, rent etc. due to the reopening of the office. Not only this, at the time of the epidemic, some companies had asked the employees to vacate the rented house and go back to their hometown.

Standard deduction will be 75 thousand rupees!

Now when the companies are calling back the employees. Returning again to Delhi-NCR or other cities to join office has increased the cost of many things. In such a situation, there is a need to update the amount of standard deduction. It is expected from the Union Budget this time that the Finance Minister can increase the standard deduction from Rs 50,000 to Rs 75,000. This will give the needed relief to the taxpayer.

What is Standard Deduction

A limit has been fixed by the Ministry of Finance to give tax relief to the salaried person on all kinds of expenses. The standard deduction of Rs 40,000 on account of medical expenses, transport allowance etc. has been reintroduced in the year 2018-19. Earlier, to give relief from income tax to the salaried class, Rs 19,200 and Rs 15,000 were given as transport allowance and medical allowance. Together these two were a deduction of Rs 34,200.

After this the standard deduction was increased to Rs 40,000 and later it was increased to Rs 50,000. This flat amount is reduced from the gross salary of the taxpayer. There is relief from this tax. It is deducted from the salary of every employed person. There is no need for any kind of claim to get exemption under this.

The post Standard Deduction Relief: The decision is done! This time no Income Tax, Finance Minister will give relief to salaried clauses first appeared on Rightsofemployees.com.

This is the reason that the government is expected to present a populist budget, in which important announcements can be made for farmers, salary class, middle class people. Finance Minister Nirmala Sitharaman can make this important announcement in the budget for taxpayers and common people.

80C exemption on investment up to 1.50 lakhs

The Finance Minister had said a few days back that she understands the problems of the middle class. The government is considering increasing the tax exemption limit under 80C in the budget. It is believed that Finance Minister Nirmala Sitharaman may announce an increase in the 80C limit on the budget day. Savings and investment options like insurance, FDs, bonds, home loan principal and PPF come under 80C. At present, under 80C, an investment of Rs 1.50 lakh is exempted. Now it can be increased to Rs 2 lakh.

Standard deduction limit may increase

It is expected that the government may increase the standard deduction limit in the budget. From the year 2019, the standard deduction remains at Rs 50,000. It is believed that the government may increase it to Rs 1,00,000. Also, the government can increase the limit of income tax exemption. At present, income up to Rs 2.50 lakh is not taxed. The government can increase this limit.

Tax relief can be available on LTCG

Through Budget 2023, the government may provide relief in Long Term Capital Gain Tax (LTCG) to retail mutual fund and stock investors in the market. Removal of LTCG on equity will increase investment in equity. Currently, if the profit exceeds Rs 1 lakh in a financial year, then 10% long-term capital gain is levied on it. This time it is expected that the government can give some relief in this.

The post 80C Increase Exemption limit: Government may increase the limit of standard deduction, know the complete list here first appeared on Rightsofemployees.com.

The government is likely to increase the annual basic exemption limit from the current Rs 2.5 lakh to Rs 5 lakh under both the old and the new tax regime in the coming budget. The current annual basic exemption limit of Rs 2.5 lakh (under both old and new tax regime) for tax payers below 60 years of age remains the same from FY 2014-15. This limit may be reconsidered considering several factors like rise in cost of living, inflation, number of taxpayers required to file income tax returns, tax revenue foregone by the government etc.

From the financial year 2014-15, the deduction limit under section 80C of the Income Tax Act, 1961 (Act) has been capped at Rs 1.5 lakh. Most of the deductions under Section 80C encourage taxpayers to invest in long-term savings such as Public Provident Fund (PPF), National Pension System (NPS) and fixed deposits which provide long-term finance for infrastructure projects in the country. does. Apart from this, the taxpayer spends the amount required to repay the home loan, insurance for self and dependents and children’s education. Therefore, it is an expectation that the deduction limit may be increased from Rs.1.5 lakh to Rs.3 lakh.

Tax-free medical reimbursement and traveling allowance exemption was withdrawn by applying standard deduction from the financial year 2018-19. Since then, while the amount of the deduction has remained constant, medical expenses and fuel costs have increased. Thus, there is a mater to consider increasing the standard deduction from the existing limit of Rs.50,000 to Rs.1 lakh.

Currently, the deduction limit for health insurance premium is Rs 25,000, including checkup for self, spouse and children, and Rs 50,000 for parents of whom at least one is a senior citizen. Considering that there has been an increase in the cost of hospitalization and medical expenses, these limits may be raised to Rs.50,000 and Rs.1 lakh respectively.

Child Education Allowance is currently exempt to the extent of Rs 100 and Rs 300 per child per month (up to a maximum of two children) for children’s education and hostel expenses respectively. This amount of exemption was fixed about two decades ago. Therefore, in view of the increase in the cost of education in recent times, there is a possibility of capping these exemptions to at least Rs 1,000 and Rs 3,000 per child per month respectively.

The deduction for interest on home loan is currently Rs 2 lakh. With interest rates rising and the deduction available for housing interest being capped at Rs 2 lakh, home loan buyers face a challenge in terms of non-tax deductible interest expense. Keeping the same in mind, this deduction can be increased from the existing limit of Rs 2 lakh to Rs 5 lakh. Also, this deduction (interest on home loan on own property) is not allowed under the new tax regime. Given that buying a home is a long-term financial commitment, it can also be assessed for providing this deduction under the new tax regime.

The post Income Tax Slab 2023: Income Taxpayers Big relief! Finance Minister can make these 6 announcements for tax payers first appeared on Rightsofemployees.com.

Income up to Rs 2.5 lakh is tax free

Tell me, at present your income up to Rs 2.5 lakh is tax free, but even after all this, you will not have to pay a single tax even on salary up to Rs 10.5 lakh.

Standard deduction of Rs 50,000 is available

if the annual income of any person is Rs 10 lakh 50,000, then you get a straight standard deduction of Rs 50,000. In this situation, your taxable income becomes Rs 10 lakh. According to media reports, the government may increase the standard deduction from Rs 50,000 to Rs 70,000 in this budget.

1.5 lakh exemption will be available in 80C.

Apart from all this, you can take advantage of full tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961. It comes with many facilities including LIC, PPF. Accordingly, your taxable income remains only Rs.8,50,000.

You will get a discount of 50,000 here, apart from this, you can also save tax through NPS under Section 80CCD of Income Tax Act 1961. In this, you will get a rebate of up to Rs 50,000, which means your taxable income will now be only Rs 8 lakh.

Here you will get a discount of 2 lakhs.

If you have bought any house or have any home loan in your name, then you also get the benefit of income tax exemption. Under Income Tax Act 24B, you get a full exemption of up to 2 lakhs. So according to this your taxable income will remain only Rs.6 lakh.

You can get a discount of Rs 75,000 by getting insurance done, apart from
this you can claim Rs 75,000 under Section 80D of Income Tax. You can also take insurance for your family. By doing this, your taxable income will be reduced to only Rs 5 lakh 25 thousand.

Apart from all this, if you are associated with any organization, you can also get tax exemption of up to Rs 25,000 through donation . In this you can claim under section 80G of tax. After taking advantage of this exemption, your taxable income remains only Rs 5 lakh, on which you do not have to pay any tax.

The post Income Tax: Finance minister changed the rules! If you earn 87,500 rupees every month, then you will not have to pay income tax first appeared on Rightsofemployees.com.

In this sequence, the government has also provided a lot of facilities to the people who pay tax for the country. In this sequence, the government has also taken many welfare decisions during the budget. Out of these, today we are going to talk about an important decision taken by the Modi government in the budget during its tenure.

Income Tax

The Income Tax Act provides many concessions and exemptions along with making provisions for tax on the income of the citizens. Tax payers also get a lot of relief from these concessions and exemptions. Keeping this in mind, an important decision was taken by the Modi government in the budget of 2018.

Income tax return

Explain that salaried individuals and pensioners can avail an exemption by default without any investment or expenditure and can get a certain amount of exemption. Actually, salaried individuals and pensioners can avail Standard Deduction while paying income tax. Standard Deduction was removed for a few years, but then the Modi government did what no one could do.

Standard deduction

was once again introduced by the Modi government in the budget of the year 2018. The then Finance Minister Arun Jaitley re-announced the standard deduction in the 2018 budget. In Budget 2018, Rs 40,000 was announced as standard deduction again. Interestingly, the provision of standard deduction was available earlier. However, it was abolished in the Finance Act 2005.

Income Tax Exemption

The deduction provided in the form of standard deduction can be claimed by all salaried employees irrespective of the requirement of any investment. At the same time, in the Interim Budget 2019, presented on February 1, 2019, before the 2019 Lok Sabha elections, an important announcement was made regarding the standard deduction.

Standard deduction

The interim budget presented on 1 February 2019 included several tax benefits for the salaried and middle class. In this budget, the exemption of Rs 10,000 was increased and the amount of standard deduction was increased from Rs 40,000 to Rs 50,000. Now, while paying income tax, salaried people get a rebate of Rs 50,000 as standard deduction. This will go a long way in helping taxpayers reduce their tax outgo.

The post Income Tax Exemption: Good News For Taxpayers! Full tax exemption of Rs 50,000, Know its Details first appeared on Rightsofemployees.com.

Employees and employee organizations believed that the rules of income tax are not in favor of the salaried. Businessmen and consultants claim exemption by showing a variety of expenses whereas salaried people have very limited options.

In order to address this complaint, the government in 2018budgetI had implemented it. Standard deduction was introduced by removing tax benefits on medical and transport allowances. Let us know what is the standard deduction and its effect on the salaried people.

what is standard deduction

Standard deduction is the amount that is deducted directly from your income. Tax is calculated according to the tax slab only on the remaining income. This reduces your total tax payable amount and sometimes people who are out of the tax slab. Let us try to understand it with an example.

The standard deduction limit is Rs 50,000. However, if your salary is less than this per annum, then your entire salary will come under standard deduction. For example, if a person takes a salary of 5 lakhs in a year, then his tax will be deducted according to 4.50 lakhs. On the other hand, if a person takes Rs 48,000 as salary in a year, then it will come under standard deduction of full salary.

Who can take advantage of this

The standard deduction can be availed by the salaried employees and pensioners who have not opted for the new tax rules. There is a provision for a lower tax rate in the new rules. Apart from this, pensioners taking pension are also entitled to get this deduction. But standard deduction is not available on family pension. This means that after the death of an employee, if any of his dependents is drawing family pension, then he is not entitled to this deduction or exemption.

The post What is standard deduction in salary ? how do employees get its benefits while paying taxes? first appeared on Rightsofemployees.com.