New Delhi: Because the monetary 12 months 2023-24 attracts to a detailed, traders are looking out for methods to attenuate their tax liabilities and enhance financial savings. With the supply of two revenue tax regime choices, understanding the nuances of every will help taxpayers make knowledgeable choices to optimize their funds.
Introduction Of New Tax Regime
Launched beneath Part 115BAC in Funds 2020, the brand new tax regime provides decrease tax charges however fewer deductions in comparison with the outdated regime. (Additionally Learn: 1 vs 3 vs 5 Yr FD Charges: Examine How A lot Return You Will Get From Main Banks)
Notably, the brand new regime has now turn out to be the default possibility, which means taxpayers who don’t actively select both regime will mechanically be positioned beneath the brand new one. (Additionally Learn: Do You Know How To Convert Your Credit score Card Invoice Into Straightforward EMI Choices? Here is How To Do It)
Tax Charges Beneath New Regime
– People with an annual revenue of as much as Rs 3 lakh are exempt from paying any tax.
– Tax charges vary from 5 p.c for incomes between Rs 3-6 lakh, to 30 p.c for incomes exceeding Rs 15 lakh.
– Furthermore, a tax rebate is out there on incomes as much as Rs 7 lakh, offering reduction for people with salaries as much as Rs 7.5 lakh.
Obtainable Allowances And Deductions Beneath New Tax Regime
Regardless of fewer deductions, sure allowances and exemptions stay obtainable beneath the brand new tax regime. These are:
– All taxpayers can declare a normal deduction of Rs 50,000.
– Deductions on long-term capital beneficial properties from fairness shares or mutual funds are capped at Rs 1 lakh.
– Moreover, varied exemptions apply to allowances equivalent to transport, conveyance, journey, and employer contributions to staff’ NPS accounts, amongst others.
