The new tax regime was seems to be a gift for the taxpayers by offering the lowest tax rates.
But unfortunately it came with a lots of drawbacks.
It has created a lot of confusions among the tax payers to choose between these two schemes.
However,Salaried and pensioners have the option to change according to their convenience.
It offers lowest rate of taxes. Taxpayer’s have high level of liquidity in their hands because it does not provide any deductions for LIC,PPF,MEDICAL INSURANCE etc.
So they can invest it in any other instruments like in Share market,Bonds,Debentures for good returns.
This can be especially helpful for taxpayers who may not subscribe to the specified modes of investments, as most of these investments have a lock-in period.
The tax rates in the New tax regime is the same for all categories of Individuals, i.e Individuals & HUF upto 60 years of age, Senior citizens above 60 years upto 80 years , and Super senior citizens above 80 years.
TAX RATE STRUCTURE:
|Tax Slab(₹)||Old Tax Rates||New Tax Rates|
|0 – 2,50,000||0%||0%|
|2,50,000 – 5,00,000||5%||5%|
|5,00,000 – 7,50,000||20%||10%|
|15,00,000 & above||30%||30%|
Unfortunately, there is no single answer to this.
It depends upon the various things.
Like your salary and investments.
While opting out to new tax regime you will loose the following benefits:
1. In case of a Self occupied property, you cannot claim a deduction on interest for a housing loan under the new tax regime. The deduction of Rs 2 lakh allowed in the existing system is not available in the new tax regime. You cannot set-off the loss of Rs 2 lakh from house property from your salary income.
2. You cannot take the benefit of investment in PPF, NSC, NPS, LIC, HEALTH INSURANCE, TUITION FEES, INTEREST ON HL etc.
3. Deductions not allowed for business income:
4. Standard Deduction of Rs 50,000 is not available under the New Income Tax Regime.
On the basis of the above ,you can figure out which scheme is good for you. It is purely a customised scheme.It solely depends upon your income and the application of your income.
Thanks for Reading!
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