10%. However, the new tax regime does not allow most of the tax exemptions and deductions that taxpayers usually claim to meet the family’s financial needs. However the New Tax Regime is optional. Taxpayers with annual income between RS.5 lakhs to Rs.10 lakhs are taxed at 20%, under the old regime. 1,00,000 is available. The employees may still furnish their investment declaration to the employer wherein section 80 C and other tax savings can be done. Through the Union Budget of Assessment Year 2021-22, the Finance Minister Nirmala Sitharman introduced the new tax regime. We recommend that taxpayers stick with the old tax regime that existed in … It is seen that with the new tax regime is likely to make taxpayers pay a higher tax amount in the long-term in comparison to the old regime. The Budget has proposed a New Tax Regime in addition to the existing, i.e. The pros and cons of the old tax regime A. By Sudhir Kaushik When this year’s Budget proposed a new tax regime with lower tax rates, the intent was to give individuals the benefit of a short term cash flow. Read More » What changes frequently is the tax rates at the different income slabs and the deductions available to different groups of people. To put it simply, the assessee can choose between the New Tax Regime and the Old Tax Regime depending on what is best suitable from a tax planning point of view. Also, those with an annual income of Rs.7.5 lakhs to Rs.10 lakhs will have to pay a 15% income tax. The pros of the old regime: The old income tax regime by enforcing investments in specified tax-saving instruments, over the period inculcated the savings culture in individual and led to savings for any future eventuality like marriage, education, purchase of house property, medical, etc. Old Tax Regime. This new Income Tax regime provides lower rate that could relief to Individual taxpayer. New Delhi: Ever since Finance Minister Nirmala Sitharaman announced an alternative tax regime in the Union Budget 2020 speech, people have been wondering whether they should forego the tax exemptions and deductions and switch to the new tax regime with lower rates or to stick to the old regime. For senior citizens, the choice is trickier as the new lower income tax rate regime does not … The tax so calculated will be subject to health and education cess of 4% Comparison between the New Tax Regime and the Old Tax Regime Pros of the New Tax Regime. 75,000 to Rs. If the old tax regime is opted, deduction of Rs. However, the taxpayers are now given an option to choose between the new tax regime and the older tax regime. 1,25,000 is available. It means, in that case, the Old Tax Regime will apply. However there are conditions that you need to be aware:-1) The New Tax Regime is optional. To put it simply, the assessee can choose between the New Tax Regime and the Old Tax Regime depending on what is best suitable from a tax planning point of view. In the old tax regime, a deduction from Rs. The Budget of 2020 brought some major changes in the Income Tax Regime and offered people the choice between paying as per the Old regime or the New regime. Deduction under section 80DDB: No deduction for any expenses actually paid for medical treatment of specified diseases and ailments is available in the new tax regime. The Union budget presented in the Parliament in February 2020, the Finance Minister proposed a New Tax Regime as an alternative to the existing Old Tax Regime for Individual and HUFs. 40,000 to Rs. Reduced Tax rates and reduced compliance: The new regime provides for lower tax rates vis-à-vis tax rates in the existing or old regime.You may ask Which deductions are allowed in new tax regime? 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