Tax Regime: As soon as the new business year begins for the salaried class people, a big dilemma has emerged – that of tax regime selection… whether to choose the old tax regime or the new tax regime. Know the answer
Tax Regime: The new business year has started from 1st April. The time has come for employed people to choose their tax regime. But the question is that it is important to understand which tax regime (New vs Old Tax Regime) is better for whom between new and old. What is the difference between the new and old tax regime, which tax regime would be better for those taking home loan or education loan, and also what should they do if someone’s income is up to Rs 7.5 lakh, taxpayers have many such questions. , which need to be answered.
As soon as the new business year starts for the salaried class people, a big dilemma has come to the fore – that of tax regime selection…choose the old tax regime or the new tax regime…how to choose the income tax regime from the office and file the tax declaration. Declaration) Mails are also coming or have already come. Employees have to choose one tax regime.
What will happen in the new regime?
The government has made the new tax regime a little more attractive. This means that now if a tax payer 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 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 us talk about the old tax regime. Under this system, those 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 regime is better for those whose income is more than Rs 7.5 lakh. Actually, under the old tax regime, which tax regime should be chosen, depending on the amount of investment and the loan taken from 80C. If someone makes maximum use of the provisions giving exemption from income tax, then he should go to the old tax regime instead of the new one. Especially for those taking education or home loan or those who have to pay huge fees for their children, the old tax regime is better. Also, people who have taken medical insurance for their elderly parents also have the advantage of staying in the old tax regime. Also, it is beneficial for those who are eligible for HRA 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 regime 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 loan, then the new tax regime is better because the tax rate in it is lower than the old tax regime. 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…
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