Tuesday , June 18 2024

Tax Regime: Which tax regime should salaried people choose on salaries above ₹7.5 lakh? Details here

Tax regime: The new business year has started from 1st April. The time has come for employed people to choose their tax system. But the question is that it is important to understand which of the new and old tax systems (new vs old tax system) is better for whom. What is the difference between the new and old tax system, which tax system will be better for those taking home loan or education loan, as well as what should they do if someone's income is up to Rs 7.5 lakh, such questions are in the minds of taxpayers. Are. Which is necessary to answer.

As soon as the new business year starts for the people of salaried class, a big dilemma has come to the fore – to choose the tax system… choose the old tax system or the new tax system… how to choose the income tax system from the office and file the tax declaration. Announcement) mails are also arriving or have arrived. Employees must choose a tax regime.

What will happen in the new system?

The government has made the new tax system a little more attractive. This means that now if a taxpayer chooses the new tax regime, he will not have to pay any income tax on annual income up to Rs 7 lakh. Along with this, you will also get the benefit of standard deduction of Rs 50 thousand in the new tax system. In this way, those whose total annual income is Rs 7.5 lakh will not have to pay any tax. Now let's talk about the old tax system. Under this system, people whose annual income is Rs 5.5 lakh will not have to pay income tax. This also includes a standard deduction of Rs 50 thousand. That means tax on income up to Rs 5.5 lakh will be zero.

What to do if your income is more than Rs 7.5 lakh?

Now the question arises that which tax system is better for those whose income is more than Rs 7.5 lakh. Actually, which tax regime should be chosen under the old tax regime, it depends on the amount of investment and the loan taken under 80C. If someone makes maximum use of the provisions giving exemption from income tax, then he should go to the old tax system instead of the new one. Especially for those who take education or home loans or who have to pay heavy fees for their children, the old tax system is better for them. Also, people who have taken medical insurance for their elderly parents also have the advantage of staying in the old tax regime. Also, for those who are eligible for HRA, it is beneficial to choose the old tax regime. But the new tax regime is better for those who do not insist on investment.

At present, the picture regarding the new and old tax system would have become clear to a great extent. In simple language, if you are not used to investing, stay away from savings schemes or you do not have any debt then the new tax system is better because the tax rate in it is lower than the old tax system. Now it is up to you to decide which tax regime is right for you as per your income and investment plan…old or new…