Now that you are almost late with your income tax return filing, don’t get in too much of a rush as that will lead to mistakes, especially if there is something new you need to look at. Now, there is a lot of confusion in the public about the Income tax slab old regime vs income tax slab new regime. This stems from changes in recent years made by the government. However, it is giving the public a choice about picking the best option for their ITR filing purposes. Now, they have to pick one, either new income tax slab regime or old income tax slab regime. Do remember at the time of your ITR filing that the default option is the income tax slab new regime. So, if you want to do your filing under income tax slab old regime, then you have to manually change it.
The reason for rolling out the new tax slab regime even though the old tax slab regime was very much functioning, was to ensure a more equitable tax structure in which the people with higher incomes pay more tax. Taxpayers have the full option to opt out of new tax regime and instead the old tax regime.
The NDA government had amended the Finance Act 2023 provisions of Section 115BAC w.e.f AY 2024-25 to make new tax regime the default tax regime.
Income tax slab old regime vs income tax slab new regime
1. Income tax slab old regime and income tax slab new regime has a big difference as the income tax slabs and rates are different. Most notably, the many tax deductions and exemptions that are allowed in Old tax regime, like PPF, NPS, NSC etc, are not allowed in the new regime. In fact, new tax slab regime offers lower rates of taxes but permits limited deductions and exemptions than the old tax slab regime.
2. Income tax slab old regime vs income tax slab new regime: Which is better? An income tax payer must do a comparative evaluation and analysis under both new income tax slab regime and old income tax slab regime and then choose the one that suits them the best. To compare tax liability under the income tax new regime, and income tax old regime, use the Income and Tax Calculator on the Income Tax Portal. Click on the link here.
3. Must an employee inform the employer about sticking to the Income tax slab old regime? That is a must. If the employee does not inform the employer that he has picked Income tax slab old regime, then it would be assumed that the default option, which is income tax slab new regime, is applicable to him. The employee has to exercise the option to opt out of the new tax regime.
4. In the income tax slab new regime, can a salaried employee claim HRA exemption? No, this exemption is not available in the new tax regime.
5. In the income tax slab new regime, is an employee eligible for Rs. 50,000 standard deduction? Significantly, under both Income tax slab old regime and income tax slab new regime, this standard deduction of Rs. 50,000 is available.
If you are confused between both income tax slab old regime vs income tax slab new regime, then just read on. We will help you pick the best option to do your ITR filing. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
