Income Tax Exemptions: If you also want to get tax exemption, then this news is of your benefit. Actually, today we are going to tell you about 6 types of exemptions in this news, how you can get them in New Tax Regime. Let us understand in the news below some ways of saving with the opinion of experts…
In Budget 2023 (Budget 2023), the government has made the new tax regime simple and less-cumbersome, giving great relief to the taxpayers. Many taxpayers are worried about the tax deductions available in the new tax regime and the old tax system, which system would be better for them? For this, it is necessary to know about the deductions and benefits available in the new tax regime. The new tax regime will now be the default system. The new tax regime includes several exemptions apart from the standard deduction.
It is important for taxpayers to know about exemptions before opting for new or old tax regime. We are telling you about the exemptions available under the new system (as well as the old system).
1. Standard deduction of Rs 50,000-
A taxpayer can claim up to Rs 50,000 for standard deduction, while every salaried individual with an income of Rs 15.5 lakh or more is entitled to Rs 52,500 as standard deduction. Under the new tax regime, the basic exemption limit has been increased to Rs 3 lakh.
There is no exemption on investing in savings schemes in the new tax, but there is no tax on income of Rs 7.5 lakh including standard deduction. Whereas, in the old tax regime, you will have to pay tax only on income above Rs 5 lakh.
2. Contribution of employers to NPS of employees-
In case of employer’s contribution to NPS account, an employee can claim tax deduction under income tax laws. The maximum deduction that can be claimed under section 80CCD(2) is 10% of the salary (Basic + DA). This tax deduction is in addition to the Section 80C deduction of Rs 1.5 lakh and Section 80CCD(1B) of Rs 50,000.
However, the contribution made by the employee under section 80CCD(1) is clubbed with section 80C. Therefore, the total amount of deduction under section 80C including NPS contribution by an employee in a financial year shall not exceed the limit of Rs.1.5 lakh.
3. Surcharge reduced to 25 percent-
With regard to personal income tax, the Finance Ministry has reduced the highest surcharge rate from 37 percent to 25 percent in the new tax regime for income above Rs 2 crore. Due to this, the highest tax rate will come down from the present 42.74 percent to 39 percent. The Finance Ministry has made it clear that taxpayers opting for the old tax regime will not get the benefit of any change in surcharge.
4. Leave Encashment-
In Budget 2023, according to the government salaried class, the tax exemption limit has been increased on leave encashment of Rs 25 lakh on retirement of private salaried employees. At present the maximum amount on which exemption can be granted is Rs 3 lakh. In Budget 2023, the Finance Ministry has kept the new tax regime as default.
5. Standard deduction on rental income-
If you own a property which you have let out, you can claim standard deduction of 30 per cent of the annual value of your let-out property.
6. PPF or Sukanya Samriddhi Yojana Maturity Income-
You will not have to pay tax on maturity proceeds from investments made in Public Provident Fund (PPF) and Sukanya Samriddhi Yojana. However, under the new regime, investments made in these accounts will not be eligible for Section 80C deduction up to Rs 1.5 lakh.
