This is my 1st article and I covered very interesting topic ‘Old Vs New Tax regime‘ because after becoming Chartered accountant my relatives and friends ask which tax regime they should choose.

Here we covered the following points –

1. Applicability

2. Tax Rate Structure

3. Exemptions & Deductions

4. Other Points

1. Applicability :-

Section 115BAC applicable only to Individual (Including Senior Citizen and Super Senior Citizen) / HUF

2. Tax Rate Structure :-

Income Old Tax Regime % New Tax Regime % Remark
Up to Rs. 2.50 Lakh 0 0  
>Rs. 2.50 Lakh Up To Rs. 5 Lakh 0 0 If Net Taxable Income is < Rs. 5 Lakh as per Sec. 87A
>Rs. 2.50 Lakh Up To Rs. 5 Lakh 5 5 If Net Taxable Income is > Rs. 5 Lakh
>Rs. 5 Lakh Up To Rs. 7.50 Lakh 20 10  
>Rs. 7.50 Lakh Up To Rs. 10 Lakh 20 15  
>Rs. 10 Lakh Up To Rs. 12.50 Lakh 30 20  
>Rs. 12.50 Lakh Up To Rs. 15 Lakh 30 25  
>Rs. 15 Lakh 30 30  

3. Exemptions & Deductions :-

Sr. No. Particular Old Tax Regime New Tax Regime
1. Under The Head:-
Salary House Rent Allowance Allowed Not Allowed
Leave Travel Allowance Allowed Not Allowed
Professional Tax Allowed Not Allowed
Standard Deduction Allowed Not Allowed
House Property Housing Loan Interest Allowed Not Allowed
Housing Loan Principal Repayment U/s 80C Allowed Not allowed
Business Or Profession Additional Depreciation Allowed Not Allowed
Investments U/s 32AD Allowed Not Allowed
Investments U/s 33AB / 33ABA Allowed Not Allowed
Expenditures U/s 35AD / 35CCC Allowed Not Allowed
Other Source Deduction For Family Pension U/s 57 Allowed Not Allowed
2. Clubbing Provisions Exemption U/s 10(32) Minor Child Income Allowed Not Allowed
3. Deduction Under Chapter VIA Deduction U/s 80C / 80D / 80G / 80E / 80TTA etc Allowed Not Allowed

4. Other Points :-

  • Deduction U/s 80CCD(2) and 80JJAA Allowed Under New Tax Regime as well as Old Tax Regime
  • Transport Allowance granted to Divyang employee, Conveyance allowance, Tour Allowance, Daily Allowance allowed under certain conditions
  • If individual or HUF having Business or Professional Income and opted New Tax Regime then he can not shifted to Old Tax Regime in Future Years but in one condition he can shifted to Old Tax Regime only when business or professional income Cease to Exist
  • if Individual or HUF having income other then business or professional income then he has the option to opt New Or Old Tax Regime every year

Author Bio

Qualification: CA in Job / Business
Company: N/A
Location: Bareilly, Uttar Pradesh, India
Member Since: 14 May 2021 | Total Posts: 1
Newly qualified chartered accountant View Full Profile

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June 2021