Tax Deductions: New Tax Regime people can save income tax in these 7 ways, know how
Tax Deductions: The most important thing for tax planning is which tax regime we choose. Do we want more exemptions or will we look at more basic exemption limit. This question comes before everyone at the beginning of every financial year. There are many deductions available in the old tax regime. But, the basic limit is very low. At the same time, in the new tax regime, the government has directly made income tax free up to Rs 12 lakh. But, people often worry that tax exemption is less in the new tax regime. The reality is something else. There are 7 types of tax exemptions available in the new tax regime as well. If you plan properly, then you can avail not only tax free income, but also many deductions on income above 12 lakhs. We are telling you about the 7 exemptions available under the new tax system, which every taxpayer should be aware of.
Standard Deduction of ₹75,000
In the new tax regime also, you get a standard deduction of ₹ 75,000. This deduction is deducted from your total income, which directly reduces the tax. Both employees and pensioners get the benefit of this.
Gratuity and leave money received on retirement
If you are retiring from your job and are getting gratuity or money for your remaining leaves, then this entire amount is tax free. Irrespective of whether you have chosen the new or old tax system.
Contribution to NPS
If your company is contributing up to 14% of your salary to NPS, then that amount is completely tax free. This exemption is available under section 80CCD (2).
Special relief for those with Agnipath Yojana
Any contribution made to the corpus fund in the Agneepath scheme is tax-exempt under section 80CCH. This is a big relief for the youth and army recruits.
₹25,000 exemption on family pension
If you get any kind of family pension, then you can get a deduction of up to ₹ 25,000 in the new tax regime. This is a small but important exemption.
Exemption on LTA, HRA and Allowances
HRA (Section 10(13A)), LTA (Section 10(5)), and various Special Allowances (Section 10(14)) – all these are allowances given by your employer and are eligible for tax exemption.
Gift up to ₹50,000 in a year
If you get a gift of up to ₹50,000 in a year from a friend or relative, then you do not have to pay tax on it. Even if you have chosen the new tax system.
Disclaimer: New Tax Regime is not limited to just tax free slab – if you use these 7 exemptions correctly, then you will not pay tax even on income of more than ₹12 lakh. All you need is wisdom and planning. Do take advice from a financial advisor for tax planning. Also take help of a CA for tax filing.
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