For those who invest their savings in life insurance, health insurance or any other tax saving schemes, the old system is better.
The Central Board of Direct Taxes (CBDT) on Tuesday extended the deadline of income tax return (ITR) filing for Assessment Year 2021-22 till March 15, 2022, for specific taxpayers who are eligible for audit, a statement by the Ministry of Finance informed.
Old System
Under the old system, no tax has to be paid on income up to Rs 2.5 lakh annually. Income between Rs 2.5 lakh to Rs 5 lakh is taxed at 5 per cent, income from Rs 5 lakh to Rs 10 lakh is taxed at 20 per cent and income above Rs 10 lakh is taxed at 30 per cent. This tax slab is valid for people below 60 years of age. People in the age group of 60 to 80 years do not have to pay any tax on income up to 3 lakhs and for those above 80 years of age up to 5 lakhs.
The New Order
Under the new system, no tax has to be paid on income up to Rs 2.5 lakh. 10 percent on income from 2.5 lakh to 5 lakh, 15 percent on income between Rs 5 to 7.5 lakh, 15 percent on income between Rs 7.5 to 10 lakh, 20 percent on income between Rs 10 to 12.5 lakh, 12.5 lakh Income up to Rs 15 lakh has to be taxed at 25 per cent and income above Rs 15 lakh at 30 per cent. The new system is equal for people of all ages.
Which system is better for whom?
For those who invest their savings in life insurance, health insurance or any other tax saving schemes, the old system is better. Apart from this, the old system proves to be much better for the parents who invest in any scheme like Sukanya Samriddhi Yojana, Kanyadan scheme of LIC for their daughter. Along with this, the old system is also considered much better for those people who have taken a loan for their house and are paying EMI. For those who donate under 80G, this system is also considered better.
For those people whose job is new, the salary is also less and money has not been invested anywhere, then the new system is considered better for such people. Apart from this, for those who have been working for a long time but have not invested anywhere and neither any loan is running, then the new system of filing ITR is best for them.
You can change the system when you want
Let us tell that people who do jobs can adopt any system according to their convenience every year. It simply means to say that if you are employed and are using the old system of filing ITR. But now if you want to experience the new system as well, then you can leave the old system and adopt the new system. Not only this, during this time if you feel that the old system of paying tax was better than the new system, then you can leave the new system and adopt the old system again.
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