Old vs New income tax regime Who should choose what?

S Venkateshwari
Old vs New income tax regime Who should choose what?

As anticipated, Nirmala Sitharaman, the finance minister, did not propose any income tax rebates. The indian middle class had nothing to celebrate because the Interim Bidget 2024 contained no tax breaks. "In accordance with convention, I do not propose any changes to taxation and propose to maintain the same tax rates for direct and indirect taxes, including import duties," Sitharaman stated when proposing a vote on account or an interim Budget for 2024-25. 

Old versus new tax laws

In Budget 2023, the Modi administration unveiled a number of new income tax initiatives. One important announcement regarding personal taxes was the default to the new income tax structure. Still, the public can benefit from the advantages of the former tax structure.

Which income tax system—the old or the new—should you choose?

You must give up a number of tax breaks and exemptions that were previously offered under the previous tax system if you choose to use the new one. "Salaried individuals are not able to make use of the standard deduction, house rent allowance (HRA), leave travel assistance (LTA), and even certain allowances that are permitted for carrying out tasks under the new tax regime. 

Both salaried and self-employed taxpayers will not be eligible for a number of deductions, including those under Section 80 C (which includes a variety of items like EPF, LIP, school Fee, PPF, NSC, ELSS, home loan repayment, etc.), 80D (for health insurance premiums), and 80 CCD(1) & 80 CCD(1B) (for NPS). You also give up your right to deduct or carry forward the loss associated with the rented property, as well as your claim to interest on your home loan for self-occupied housing. Additionally, under the new plan, you won't be able to deduct any brought-forward losses from your current income," tax and investment expert Balwant Jain stated.







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