Nirmala Sitharaman had announced that the new taxation system imposed by the government would be in default from the financial year 2023-24. Under the new system, tax exemption can be obtained on income of Rs 7 lakh annually. Taxpayers with annual income up to Rs 7 lakh will save Rs 33,800 in taxes after increasing the exemption under the new income tax regime through the Finance Minister.

Income Tax

There are some benefits in the new tax regime but there is no exemption on any investment in it. However, standard deduction has definitely been added to the new tax regime. On the other hand, if you want investment or other exemption, then you will have to file tax according to the old tax regime. Many exemptions are available in the old tax regime. Today we are going to tell you about it…
Deductions available under old tax regime

1. Standard Deduction: Rs.50000 for salaried individuals.

2.Section 80CCD(1B): Additional deduction up to Rs 50,000 for deposits in NPS account.

3.Section 80TTA: This section provides a deduction of a maximum of Rs 10,000 on interest income from savings account of a bank, co-operative society or post office for an individual or a HUF.

4.Section 80D: It allows deduction on health insurance premium.

5. Section 80G: Donations made to eligible trusts and charitable institutions are eligible for deduction.

6. Section 80C: Invest in EPF and PPF, ELSS, life insurance premium, home loan repayment, SSY, NSC and SCSS and get exemption.

Taxpayers should note that if you are an employee and fail to choose between the new-old tax regime, TDS will be deducted at the new tax regime rates. The matter has become clear from a circular of the Central Board of Direct Taxes.

It said, “If the notice is not given by the employee, it will be deemed 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. shall deduct tax at source on the income under section 192 of the Act, in accordance with the rates provided under sub-section (lA) of section 115BAC.”

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However, in the last several years, a lot of strictness has been shown by the Ministry of Finance in this regard. On asking questions on non-imposition of tax exemption from the Finance Minister, the answer kept getting that not imposing new tax is also tax exemption. However, with the last full budget before the elections this year, experts are also hopeful about tax exemptions.

He says that due to the increase in inflation, the government can give tax exemption as a relief to the common people. This will put additional spendable amount in the hands of common people. Tax matters expert Devendra Kumar Mishra believes that the government will definitely give relief to the common people this time.

No tax will be charged up to Rs 6 lakh

Income of common people up to Rs 5 lakh can be further increased to Rs 6 lakh tax free. The biggest relief can be found in the head of income of Rs 15 lakh without tax exemption, which is kept in the range of 20 percent. This can be increased up to Rs 17 lakh.

Standard deduction limit will also increase

Apart from this, the government can also increase the standard deduction limit for the salaried class. It can be increased from Rs 50 thousand to Rs one lakh. Also, tax exemption on interest can be 25 thousand.

The post New slab in Income Tax. No tax up to 6 lakhs. Rs 1 lakh more will be able to claim tax free first appeared on Rightsofemployees.com.