Budget 2024: Finance Minister Nirmala Sitharaman has made changes in the new tax regime. After this, which one will be beneficial to choose in the old or new?
Budget 2024: In the budget, the Finance Minister did not make any changes in the old tax regime but has increased the exemption limit in the new tax regime. This has made the new tax regime better than before. After the announcements made by Finance Minister Nirmala Sitharaman in Budget 2024, there is confusion among taxpayers as to which system will be beneficial to choose now. If you are also a taxpayer, then we explain all the calculations to you.
If the income is low, choose the new tax regime
The standard deduction in the new tax regime has been increased from Rs 50,000 to Rs 75,000. Tax experts say that if you are not claiming a deduction of up to Rs 2 lakh on home loan interest or are not eligible for a hefty house rent allowance (HRA), then it would be better to go to the new, simplified tax regime. Without either of these two, the old tax system does not make sense.
Proposed tax structure under the new tax system
- ₹0-3 lakh – 0%
- ₹3-7 lakh – 5%
- ₹7-10 lakh – 10%
- ₹10-12 lakh – 15%
- ₹12-15 lakh – 20%
- Above ₹15 lakh – 30%
Choose the old tax regime if your income is high
If your income is high, choosing the old tax regime will be beneficial. For example, if a salaried employee with an income of Rs 11 lakh claims deductions of more than Rs 3,93,750, the old tax regime will result in more savings. Now, it is debatable whether it is practically possible for an individual with an income of Rs 11 lakh to claim this level of deduction. However, couples with dual incomes may be able to afford higher deductions. In the old tax regime, you can avail tax exemption on health insurance premium, children’s school fees, investment under 80C, home loan or house rent expenses. In such a situation, if your money is spent on these things, then the old tax regime will be right for you.
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