Old vs New Tax Regime
New Tax Regime is becoming increasingly popular due to low tax rates and easy process. Especially salaried people are able to avail the benefit of zero tax on income up to ₹ 12.75 lakh and other people with income up to ₹ 12 lakh. This is the reason why a large number of taxpayers are choosing this option without much thought.
But the decision is not so easy
However, experts believe that it is not right to take decisions only by looking at low tax rates. Many exemptions and deductions available in the old tax regime play an important role in saving tax. Most of these exemptions have been removed in the new regime, due to which the total tax burden may increase in many cases.
Features of old system
HRA, children's education allowance, LTC, transport allowance and many other benefits are available in the old tax regime. If used properly, taxable income can be significantly reduced. Especially for those people who invest money in investment and tax saving schemes, this option can still be beneficial for them.
Some common benefits are available in both the regimes
There are some tax benefits which are available in both the systems. For example, tax exemption up to ₹200 per meal is being given on food coupons, which was earlier ₹50. Apart from this, there is a fixed rule of tax on car perquisite given by the company, due to which the additional allowance is not taxed. Gifts and vouchers up to ₹15,000 are also tax free in both the regimes.
ITR filing deadline
The last date for filing Income Tax Return (ITR) for the financial year 202627 (Assessment Year 202728) has been fixed as 31 July 2027. At the same time, the last date for assessment year 202627 is 31 July 2026 and the new rules will not be applicable on it.
Only the right choice will be beneficial
Experts say that taxpayers should compare both the tax regimes based on their income, expenditure and investment habits. While the new regime is simple, the old regime offers the opportunity to save more with proper planning. Therefore, it is very important to choose the right option while filing ITR.
-
Push ethanol, but keep it in the mix
-
Samsung seeks to renegotiate supply terms with centre
-
Why Gen Z is getting fired so fast in the AI job market, says report
-
'Better late than never': Hayden Panettiere opens up about being bisexual and past struggles
-
What Bengal thinks today: Pan-India-wise, May 4 signals more regional parties moving into existential crises
