Question: Should I Opt For New Tax Regime Or Old?

What is the advantage of new tax regime?

The new income tax rate is beneficial for people with low investments in policy schemes.

It offers seven lower tax slabs.

Anyone paying taxes without claiming exemptions under the existing system can benefit from paying a lower upfront rate of tax..

Which deduction is still allowed for 2020?

Any deduction under chapter VIA (like Section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, and so on….Share article.Taxable Income SlabsTax RatesRs 10 lakh to Rs 12.5 lakh20%Rs 12.5 lakh to Rs 15 lakh25%Rs 15 lakh and above30%4 more rows•Feb 7, 2020

Is standard deduction allowed in new tax regime?

With three more tax slabs, the new tax regime has only added to the complication. … Anyone claiming tax exemptions and deductions of more than Rs 2.5 lakh in a year will not gain from the new structure. This threshold of Rs 2.5 lakh includes the standard deduction of Rs 50,000 for which no investment is required.

What is the 80c limit for 2020 21?

The maximum deductions available under a few sections are as follows: Section 80C to 80CCC: ₹ 1,50,000. Section 80CCD: ₹ 50,000. Section 80D: ₹ 30,000 for self, spouse and children, ₹30,000 for parents, ₹50,000 for senior citizens.

Should I opt for new tax regime?

New taxation regime is better for employees with less salary and less investments resulting in lesser deductions and exemptions. … It could also include senior citizens who do not draw pension from their employer and are therefore not eligible for the standard deduction of Rs 50,000.

Which is better old tax regime or new tax regime?

One, in the new regime, the tax slabs have increased, accompanied by lowering of rates in the sub-Rs 15 lakh range….Enter new tax regime – More slabs, lower tax rate but no way to reduce taxes.Tax Slab(₹)Old Tax RatesNew Tax Rates10,00,000 – 12,50,00030%20%12,50,000 – 15,00,00030%25%15,00,000 & above30%30%4 more rows•Mar 12, 2020

Which regime is better for income tax?

Calculations show that salaried individuals claiming a large number of exemptions (80C, 80D, interest on housing loan, HRA and LTA etc.) are likely to be better off in the existing income tax regime.

What deductions are not allowed in new tax regime?

The important tax breaks that will not be available under the new tax regime include Section 80C (Investments in PF, NPS, Life insurance premium, home loan principal repayment etc.), Section 80D (medical insurance premium), tax breaks on HRA (House Rent Allowance) and on interest paid on housing loan.

Can I change from new tax regime to old?

Effectively, you can switch between new and old tax regime at the time of filing ITR. … CBDT also clarifies that even if one opts for New Tax Regime and the same intimation is made to employer or Deductor, it shall be only for the purposes of TDS during the previous year and cannot be modified during that year.

Who will benefit from new tax regime?

70% of taxpayers will benefit from new income tax rates, slabs: Finance Ministry. Mumbai: The finance ministry expects at least 80 per cent of the taxpayers to move to the new income tax regime, Revenue Secretary Ajay Bhushan Pandey said on Friday.

How do I file my new tax regime?

A taxpayer is required to opt for the new regime at the time of filing the ITR, as per newly-inserted Section 115AC of the Income Tax Act, 1961. This will be done through the new Form 10-IE notified by CBDT. The new tax regime is available only to individuals and Hindu Undivided Family (HUF).

Is 80c removed in 2020?

[Budget 2020] Tax Rates Lowered But HRA, 80C, and INR 50,000 Standard Deduction Gone. In the Union Budget 2020, finance minister Nirmala Sitharaman proposed a new tax regime with lower tax rates for different income groups. … However, all without deductions.