Legal ADDA

As per Financial Budget 2020, From 1st April 2020 There is New Income Tax Regime comes into force for FY 2020-21.

  • New Income Tax Regime : Advantages and Disadvantages

    • New Income Tax Structure is applicable to Person who is not having Income from Business and Profession. However its optional on the hand of Tax Payer.
    • New Tax Scheme tax rates are lower subject to avoiding Tax Deduction and Tax Exemption.
    • New Tax Regime Rates are as:
      • Income Upto Rs. 2,50,000 : Tax Rate is Nil
      • Income From Rs. 2,50,001 to Rs. 5,00,000 : Tax Rate is 5%
      • Income From Rs. 5,00,001 to Rs. 7,50,000 : Tax Rate is 10%
      • Income From Rs. 7,50,001 to Rs. 10,00,000 : Tax Rate is 15%
      • Income From Rs. 10,00,001 to Rs. 12,50,000 : Tax Rate is 20%
      • Income From Rs. 12,50,001 to Rs. 15,00,000 : Tax Rate is 25%
      • Income Above Rs. 15,00,000 : Tax Rate is 30%
    • Tax Payer can choose between New Tax Scheme with lower tax rates without Deduction and Exemptions or Old Tax Regime with deduction and exemptions.
    • Following Deductions and Exemptions will not allow to tax payer if they choose New Income Tax Regime:
      • Standard Deduction (Rs. 50,000) from Salary and profession tax will not allow in new regime
      • House Rent Allowance (HRA) will not allow in new regime
      • Housing Loan Interest (Rs. 2,00,000-Maximum) will not allow in new regime
      • Leave Travel Allowance (LTA) will not allow in new regime
      • Deduction Under Chapter VIA of The Income Tax Act, 1961 will not allow under New Tax Regime :
        • Section 80C Deductions : Life Insurance Premium, Tax Saving Mutual Fund, Housing Loan repayment etc
        • Sec 80CCC : Pension Premium
        • Section 80D: Health Insurance Policy premium
        • Section 80TTA: Saving Bank Interest Deduction
        • All Chapter VIA Deductions.
    • Thus, New Tax Structure is much complicated compare to old Income Tax Structure.

Click For Calculate your Tax as per New Income Tax Regime and Choose Best Regime which Saves Tax.

Leave a Reply

Your email address will not be published. Required fields are marked *