Old tax regime is still better for high earners, many types of exemptions will be available on investment, thousands of tax will be saved
New Delhi. As the government has proposed the new tax regime as a default tax regime, taxpayers should evaluate all the possible deductions claimed, including House Rent Allowance (HRA), and then choose the tax regime. should be decided about. Let us tell you that in this budget, Finance Minister Nirmala Sitharaman has made many big announcements to make the new tax regime attractive. The new tax system has been made by-default. Apart from this, the exemption limit has been increased from Rs 5 lakh to Rs 7 lakh. This time standard deduction has also been included in the new tax system.
At the same time, no change has been made in the old tax system. Under the old tax regime, income up to Rs 2.5 lakh was tax free. However, in the old tax regime, there is a provision for standard deduction and many exemptions in other items. These benefits were not given in the new tax regime. In such a situation, there is a discussion among the people that which system is beneficial for the taxpayers in the old and new tax system. Let us know how much tax will have to be paid on how much amount under both the tax regimes.
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Know which slab is better
New tax slab is a better option for large population. However, an analysis suggests that the new tax regime will benefit small taxpayers who do not intend to make any investments in tax saving instruments and who seek cash liquidity. If there is no investment of any kind, then at any cost people should choose the new tax slab, due to which they will have to pay less tax. But if you can take advantage of all kinds of deductions, then only the old tax slab can prove to be better.
To those earning up to 7 lakhs
For example, those earning up to Rs 7 lakh will not have to pay any tax under the new tax regime. However, those earning the same amount would not have to pay any tax even in the old tax system if they also take certain deductions like tax-saving of Rs 1.5 lakh under Section 80C, standard deduction of Rs 50,000 and health insurance.
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Old tax regime is better for high income taxpayers
Taxpayers with higher income will still benefit from the old tax regime. For example, a taxpayer earning Rs 15 lakh will have a taxable income of Rs 9,65,000 after most deductions and will pay tax of Rs 1,09,720 under the old regime as against Rs 1,45,600 in the new regime. Similarly, those with a total income of Rs 20 lakh will benefit from the old system. Those taking HRA benefits in the higher tax bracket will also get more benefits in the old tax regime.
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Tags: business news in hindi, income tax, income tax return, income tax slabs, taxpayer
FIRST PUBLISHED : February 03, 2023, 17:26 IST