“Explore the deductions available under the Old vs. New Income Tax Regime effective from 01.04.2023 (FY 2023-2024, AY 2024-2025).”
A taxpayer needs to select Old or New tax regime, as beneficial to him or her.
Below here are the deductions available in Old Vs. New tax regime, in brief, which should help in making the required choice. This is applicable from 01.04.2023 i.e. for FY 2023-2024 or say AY 2024-2025.
(Amount in Rs.)
|
OLD REGIME |
NEW REGIME |
|---|---|
| No tax if income is up to 5 lakhs under the old tax regime | Full tax rebate on an income up to 7 lakhs |
| Standard deduction of 50,000 available, thus making the exemption limit upto 5.5 lakhs | Standard deduction of 50,000 available, thus making the exemption limit upto 7.5 lakhs |
| Deduction of 1.5 lakh under section 80C | Not available |
| Other exemptions available are HRA, LTA, Food Allowances, Entertainment Allowance, Professional Tax, Interest on Home Loan u/s 24b on: Self-occupied or vacant property, Deduction u/s 80C (EPF/ LIC/ELSS/PPF/FD/Children’s tuition fee etc), Employee’s (own) contribution to NPS, Medical insurance premium – 80D, Disabled Individual – 80U, Interest on education loan – 80E, Interest on Electric vehicle loan – 80EEB, Donation to Political party/trust etc – 80G, Savings Bank Interest u/s 80TTA and 80TTB, Other Chapter VI-A deductions etc. | Not available |
| Perquisites for official purpose, Interest on Home Loan u/s 24b on: Let-out property, Employer’s contribution to NPS, All contributions to Agniveer Corpus Fund – 80CCH, Deduction on Family Pension Income, Gifts upto Rs 5,000, Exemption on voluntary retirement 10(10C), Exemption on gratuity u/s 10(10), Exemption on Leave encashment u/s 10(10AA), Daily Allowance, Conveyance Allowance, Transport Allowance for a specially-abled person etc. |
Available |
Note:
i. In case of salaried taxpayers, they may opt new tax regime for now, and changes as appropriate may be made while making final submissions.
ii. In case of other taxpayers, there is no need to select the regime as of now. The same can be done as appropriate, while making final submissions.
In both the above cases, taxpayer should do/get done calculations under both tax regimes, and accordingly take the decision, based on the facts and circumstances as might be applicable to the particular case.
The above is only for awareness purpose, and may vary depending upon the facts and circumstances of each case. Kindly revert if there is any issue/suggestion/query.
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CA Brijesh Baranwal – Email: [email protected]
