Tax Saving: Benefit of tax reduction not only in old but also in new regime, income tax will be saved in 6 ways

Tax Saving in New Tax Regime: Under the new tax regime, income up to Rs 12 lakh is tax free from April 1, 2025. Under this, one also gets the benefit of standard deduction of Rs 75000. Apart from this, let us know how you can save tax in this.

New Tax Regime: The new financial year has started on 1 April. People will soon start filing Income Tax Returns (ITR). This return will be filed for the financial year 2024-25. Along with this, people are also calculating whether they should choose the old or new tax regime on the basis of their income and investment, so that their income tax can be saved. In this article, we will tell you 6 easy ways to save tax under the new tax regime.

Old Vs New Tax Regime

Under the old tax regime, the tax payer gets the benefit of many types of exemptions and deductions. But the number of exemptions and deductions is less in the new tax regime. If you have made many tax saving investments then the old regime may still be better for you. But if you do not have many tax saving investments then the new regime can be beneficial because the tax slab rate in it is low.

Tax exemptions and deductions in the new tax regime

Finance Minister Nirmala Sitharaman had announced some new deductions under the new tax regime in the 2025 budget. But still the old regime is better for investors. Let us know how you can save income tax in 6 ways under the new regime.

1. Standard Deduction

In the new tax regime, the standard deduction has been increased from Rs 50,000 to Rs 75,000. This will be applicable from the financial year 2025-26. In the old regime, it is still Rs 50,000. This means that in the new regime you can save Rs 25,000 more tax.

2. Employer’s investment in NPS Section 80CCD (2)

This exemption is only for the salaried class. Freelancers or those doing their own business cannot take advantage of it. If your employer invests in your National Pension System (NPS) account, then you are entitled to get additional exemption. For government employees, it is up to 14% of Basic + DA. For private sector employees, it was earlier up to 10%.

3. Contribution to Agniveer Corpus Fund – Section 80CCH(2)

Under the Agneepath scheme, contributions made by Agniveer and the government are tax exempt. If the beneficiary or his nominee receives money under the scheme, then tax exemption is also given on that. This exemption is available in both the old and new regimes.

4. Exemption on family pension – Section 57(iia)

If the family of an employee receives pension after his death, then exemption is given on it. In the new tax regime, one-third of the pension or Rs 25,000 (whichever is less) is tax-free. This is a matter of relief for such families.

5. Transport and conveyance allowance

Disabled employees get an exemption of up to Rs 3,200 per month for commuting from home to office. Exemption is given on the basis of actual expenses incurred during office work. This exemption is small but useful for employees.

6. Some exemptions under section 10

Earlier, there was no exemption under section 10 in the new tax regime. But now some exemptions have been included. For those taking VRS, there is tax exemption on an amount up to Rs 5 lakh. Gratuity is completely exempted for government employees and for private employees it depends on the situation. Apart from this, the amount received in lieu of leave at the time of retirement or resignation in leave encashment is tax-free up to Rs 25 lakh. Tax will be levied on an amount more than this.

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