Important news for tax payers. In fact, according to an update, tax payers can also save in the new regime. If you do not know, then let us know below in this news 6 ways to save tax…
The Government of India has introduced the new tax regime as a more easy and less paperwork scheme, in which some relief has been given in tax rates. From the financial year 2023-23, this new tax regime will become the default option. That is, if you have not selected the option of the old tax regime, then you will automatically come under the purview of the new regime.
The general belief is that there is no exemption of any kind in the new tax regime. But this is not completely true. There are some such exemptions, which can be availed not only in the old but also in the new tax regime. It is important to know about all these benefits in order to choose the right tax regime for yourself.
1. Standard deduction of 50 thousand-
To make the new tax regime more attractive in the new budget, the benefit of standard deduction of Rs 50,000 has been added to it. This benefit is available only to the people getting salary or pension. Businessmen or people engaged in self-employment do not get the benefit of this. After the death of the family pensioner, that is, the pensioner in his place also gets the benefit of standard deduction.
2. Employer’s contribution in NPS-
In the new tax regime, there is no benefit under 80C on investment up to Rs 1.5 lakh in the National Pension System (NPS). Nor, under 80CCD (1B), the benefit of additional investment up to Rs 50 thousand is available. But the contribution made by the employer in NPS is also eligible for deduction under section 80CCD(2) in the new tax regime. This benefit is available only on contribution up to a maximum of 10% of the employee’s basic salary and dearness allowance.
For government employees, this limit is 14 percent. For this, the contribution made by the employer to NPS is first added to the salary of the employee and then the benefit of deduction of 10% of the salary (14% in the case of government employees) is given on it. Generally people have less information about this tax benefit.
However, the annual tax free limit for benefits received from the employer is Rs 7.5 lakh. The amount of benefit received above this is added to the taxable allowance. To take advantage of this deduction, you will have to talk to your employer, because you will be able to take advantage of it only after putting 10% of your salary + dearness allowance in NPS on their behalf.
3. Employer’s contribution in EPF-
Generally, 12% of the basic salary is contributed by your employer to your Employee Provident Fund (EPF). Exemption is also available on this contribution in the new tax regime. To take advantage of this, the annual retirement benefit you get from the employer should not exceed Rs 7.5 lakh.
4. Tax exemption on maturity amount of life insurance-
The tax benefit available on the maturity amount of life insurance policy is also applicable in the new tax regime. But if you have bought ULIP or Endowment Plan, then it is necessary to fulfill certain conditions to get this benefit. From the financial year 2021-22, the government has imposed some restrictions on the tax-free maturity amount of ULIPs.
If you pay a premium of more than Rs 2.5 lakh in a year on a policy bought after February 1, 2021, then you will have to pay tax on the maturity amount. Budget 2023 has imposed a similar limit on traditional non-ULIP policies as well. Under this, if the aggregate premium of the policy purchased after April 1, 2023 is more than Rs 5 lakh, then tax will have to be paid on the amount received on maturity. But in any case, the amount received by the nominee after the death of the policyholder is not taxed.
5. Maturity amount of PPF or SSY-
The tax benefit under 80C in the old tax regime on investment up to Rs 1.5 lakh made in Public Provident Fund (PPF) or Sukanya Samriddhi Yojana (SSY) is not available in the new tax regime. But you will not have to pay tax even under the new tax regime on the amount received on maturity of the investments made in these schemes.
6. Standard deduction on rental income-
If you have a property that you have given out on rent, you can claim the benefit of standard deduction at the rate of 30% on its annual value. If the municipal tax is deducted from the total rent received from the property during a year, then its annual value will come out. You can claim an amount equal to 30% of this amount as standard deduction.
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