New Tax Regime: Many tax payers are worried about whether the transition to the new tax regime will be beneficial or not. However, experts say that the new tax system also has many benefits. It is explained that you can get tax exemptions by choosing it. These deductions are said to save the tax payers lakhs of rupees.
We have entered a new financial year. Some changes have taken place in terms of financial transactions since April 1st. There are also some new guidelines. One of them is the new income tax system. Union Finance Minister Nirmala Sitharaman recently introduced the new tax regime in the interim budget session. It started from April 1st. In this, tax slabs as well as tax rates related to concessions have also changed. The new tax regime applies to all taxpayers, including individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs). In this order, some confusion is arising among the tax payers. They are especially worried about whether there will be tax exemptions due to the transition to the new tax system. Is this true? Wouldn’t it be beneficial to switch to the new tax system? Isn’t there a tax saving option? Let’s know full details..
Exemptions in the new taxation system.
Many tax payers are worried about whether the transition to the new tax regime will be beneficial or not. However, experts say that the new tax system also has many benefits. It is explained that you can get tax exemptions by choosing it. These deductions are said to save the tax payers lakhs of rupees. Let us look at some of such tax exemptions in the new tax regime.
Under the new policy, taxpayers falling under the disabled category can claim special exemption. If such taxpayers receive any transport allowance, they can claim income tax deduction on the same. This applies to both private and public sector employees.
Apart from that, employees who are transferred or go on tour at any company expense can claim income tax deductions. Additionally, the taxpayer can claim allowances and facility charges provided by the company to its employees.
Under the new tax regime, the amount of gratuity and leave encashment under Section 10 (10C) of Income Tax is not leviable to Income Tax. While tax exemption was available on home loans under the old regime, now with Section 24, exemption can be availed. However, it has some terms and conditions.
Apart from this, the new system also provides a surprise exemption to taxpayers on gifts received in any one financial year. However, for this Rs. A fixed amount of up to 50,000 is required.
Another such exemption is for taxpayers who earn through family pension. As per Section 57 of Income Tax, even under the new system such family pension will be exempted from total taxation.
Read also: EPFO KYC: Updating e-KYC in EPFO is very easy, know its…
