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    Guidance From SGC - New - Old Tax Regime

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    Manoj Bisht

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    © All Rights Reserved
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    Guidance From SGC - New - Old Tax Regime

    Uploaded by

    Manoj Bisht
    9 views2 pages

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    Guidance from SGC_New_Old Tax Regime

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    9 views2 pages

    Guidance From SGC - New - Old Tax Regime

    Uploaded by

    Manoj Bisht

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Guidance from SGC : New Vs Old Tax Regime

    Dear Incedoers,

    In budget 2020, government had introduced a new income tax slab for individuals who will forego various tax exemptions and deductions
    under a "Simplified Tax Regime". Further in union budget 2023, there have been minor changes in the new tax regime. Through this
    document we wish to update you with the latest information for quick reference.

    In the New Tax Regime, taxpayer will have to forego around 70 exemption and deductions, which they have been claiming in the old tax
    regime. Some of the 70 exemptions and deductions, which will not be available in the new tax regime are mentioned below.

    • House Rent Allowance u/s 10 (13A)

    • Leave Travel Allowance

    • Children Education and Hostel Allowance

    • Uniform and Washing Allowance

    • Helper Allowance

    • Meal Voucher

    • Interest paid on Housing Loan

    • Investments under Sec 80C : Rs. 1,50,000

    • Employee’s contribution to NPS : Rs. 50,000

    • Medical insurance premium : Rs. 25,000 for Self, Spouse and Children

    • Medical insurance premium : Rs.25,000/- for parents (Rs.50,000/- for senior citizens)

    • Expenses incurred on the medical treatment, training, or rehabilitation of a disabled dependent : Rs.75,000 (Rs.1,25,000/- for
    the person with severe disability )

    • Treatment of self or dependent for specified disease : Rs. 40,000 (Rs. 1,00,000 for senior citizens)

    • Interest on Education Loan

    • Donation paid to some specified institutions.

    • Savings Bank Interest : Rs 10,000 under Sec 80TTA

    • Disability of self : Rs.75,000 to Rs. 1,25,000 depending on disability


    Applicable Tax Rates : Old and New Tax Regime

    Income (In INR) Old Tax Regime New Tax Regime


    Upto 2.5 lakhs NIL NIL
    2.5 – 3 lakhs 5% Nil
    3 – 5 lakhs 5% 5%
    5 – 6 lakhs 20% 5%
    6 – 9 lakhs 20% 10%
    9 – 10 lakhs 20% 15%
    10 – 12 lakhs 30% 15%
    12 – 15 lakhs 30% 20%
    Above 15 lakhs 30% 30%

    Note: Tax rebate under section 87A is available up to income of INR 7 lakhs in new tax regime while it is up to INR 5 lakhs in old tax regime.

    The New Tax Regime has proposed lower income-tax rates, for income segments up to Rs. 15 lakh but you also need to remember that the
    proposed lower tax rates will be applicable only if you are willing to give up various exemptions and deductions, which are available in the
    Old tax regime under various provisions of the Income-tax Act, 1961.

    This means that when you opt for the New Tax Regime, you will have to forgo some important exemptions such as Leave Travel Allowance
    (LTA), House Rent Allowance (HRA), etc. and deductions available under chapter VI A of the Act that grant deductions under Section 80 [such
    as 80C, 80CCC, 80CCD, 80D, 80DD, 80E, 80EE, 80G, 80GG, 80GGA, 80GGC, etc. available to salaried individuals and the deduction on interest
    home loan, under Section 24(b).

    Only the deduction under Section 80CCD(2) i.e., employer’s contribution in a national pension scheme (NPS) and standard deduction of INR
    50,000 can be claimed in new tax regime.

    Union Budget 2020 offers lower income tax rates by forgoing the tax exemptions/deductions or continue to pay tax under the existing
    income tax laws by claiming the applicable exemptions and deductions. Briefly, the new regime (Option 2) will suit individuals in lower tax
    brackets and those who have less amount of claims under the above heads. For others, the earlier rates be beneficial.

    Note: As per the income tax provision employee needs to choose the Tax Regime at the start of every financial year. If employee has not
    chosen the tax regime, for any reason, then the tax will be deducted according to new tax regime by default.

    Should you have any additional queries, please write to [email protected]

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