Default New Tax Regimes And Benefits
Every earning citizen of the country had a complaint from the government, and that's about income tax laws. The tax laws in India are very stressful for the earning population of the country. The government has tried to help the citizens of the country out with the new text regime. The new tax regime was introduced in the country's budget for 2020. The new tax regime that started in 2020-21 gave the citizens an option to select any one tax regime between the new and the old tax regime.
If you opted for the old tax regime, then you would have been offered existing deductions such as sections 80c and 80d of the income tax act, 1961. In the budget of 2023, the Government came up with some more deductions and tax slabs to make it more attractive for taxpayers.
Is the new tax regime a default option for taxpayers?
The new tax regime is made a default option from the financial year 2023-24. Every fiscal year, a Hindu undivided family or an individual will be given the option to choose between the old and the new tax regime. This is applicable if they do not have any business income. Any Hindu undivided family or individual can choose the new income tax regime if they have an income.
Benefits of the new tax regime:
The new tax regime is introduced by the government to bring more benefits to the people. So let's know the help of the new tax regime:
i. You can invest your money anywhere you want under the new tax regime. There is no need to invest your money in tax-saving schemes or insurance plans that are not financially benefiting you. You have the independence to choose any investment option.
ii. One can claim tax exemption for transport allowances. But the person should be exceptionally able to claim this.
iii. The government has also announced a standard deduction of Rs 50,000 under the new tax regime from the fiscal year 2023-24.
iv. In the budget of 2023, a new tax deduction under section 57(lia) of the family pension scheme is also announced.
v. It is also mentioned in the budget of 2023 that you can claim a tax deduction on the amount deposited or paid in the Agniveer Corpus Fund under Section 80 CCH(2).
vi. Under the new tax regime, the minimum taxable income is raised to 7 lac annually. A person will not have to pay any tax if his income is less than 7 lac.
vii. In the budget 2023, the basic exemption limit has been hiked from Rs3 lakh to Rs25 lakh under the new tax regime.
After many years of paying a high amount of tax on your hard-earned money, the government has finally brought some changes in the tax regime that can help one to save some money. To get the maximum benefits of the new tax regime, one can also get some consultation with a tax lawyer or CA.
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