look news india
ITR Filing: The last date for filing income tax returns is approaching. Meanwhile, many employed people are unable to understand whether they should go to the new tax system or the old one. In last year's budget, the new tax system has been made the default option. That is, those who have not informed their employer about choosing the tax system will be taxed according to the new tax system. Let us know who should shift to the new tax system and why.
First know what is the new tax system
Under the new tax system for the financial year 2023-24, there will be no tax on income up to Rs 3 lakh. At the same time, 5 percent tax will be levied on income up to Rs 3-6 lakh. You will have to pay 10 percent tax on income of Rs 6-9 lakh. 15 percent tax will be levied on income of Rs 9-12 lakh. You will have to pay 20 percent tax on income of Rs 12 to 15 lakh. At the same time, you will have to pay 30 percent tax on income above Rs 15 lakh. Let us tell you that if your income is up to Rs 7 lakh, then your entire income will be tax free with exemption.
You will get these 3 discounts
Under the new tax regime, the tax rate is very low, but deductions are limited. There are only 3 deductions available in the new tax regime.
1- The first is standard deduction, under which salaried people get tax exemption up to Rs 50,000.
2- The second deduction is on investments made in corporate NPS under 80CCD (2). Under this, employees of private companies can invest up to 10 percent of their basic salary and dearness allowance in NPS and you will get tax exemption on this. If you are a government employee, then this figure can be up to 14 percent for you.
3- Apart from this, the third deduction is made in the Agneepath scheme under 80CCH. In this, whatever money is invested in the Agniveer Corpus Fund by the employee or the government is tax free.
Who should adopt the new tax regime?
If you do not invest much and are not availing facilities like savings, insurance, medical, NPS etc. under the old tax system, then the new tax system is better for you. Also, if you do not pay rent and do not have a home loan, then also the new tax system will be better for you. In the old tax system, all these things get tax exemption up to a certain limit, due to which it looks attractive, but if you do not take tax benefits on those things, then coming to the new tax system will benefit you and the income tax will be very low.