New versus old income tax regime: Know which one suits you

THE ECONOMIC TIMES Sat, Apr 25, 2020 | 11:55 AM IST Existing versus new tax regime

Comparison of new income tax regime with old tax regime As mentioned in the example, it is evident that maximum benefit in terms of tax savings that can be availed under the new regime (in case no investments are made) is Rs 75,000. The highest tax rate, i.e. 42.7%, will continue to be a major challenge for HNIs. How to calculate income tax for FY 2020-21 From FY 2020-21, an individual taxpayer will have an option to choose between existing and new tax regime. In order to know which tax regime is beneficial for an individual, it is important to know how much will be the tax liability in both regimes. How to choose the tax regime for TDS on salary for FY2020-21 Individuals should remember that TDS on salary is deducted as per the applicable tax slab rates on your income whereas TDS on say interest income from fixed deposits is deducted at only 10%. Claim over Rs 2.5 lakh tax deduction? Don't opt for new income tax regime If you wish to opt for the new tax regime, you will have to inform your employer through the declaration form. The employer will start deducting tax at source (TDS) accordingly for each month. Find out which tax option suits you. Incomes that are exempted under the proposed new tax regime 70 deductions will be removed in the new regime. However, there are certain incomes that are exempt. How the old tax regime serves the double benefit of tax-saving and financial well-being It is universally accepted that tax breaks on investments nudge people to save more. The new tax regime has taken away the incentive to save. The deductions ensure financial wellbeing of taxpayers. Do you know the role they plan in your financial plan? Income tax benefits on EPF contributions: New vs existing tax regime In the new tax regime, the tax benefit available on employee's own contribution to EPF account is impacted. Opting for new income tax regime? Don't stop investing in these financial products Keep in mind that foregoing the deductions under Section 80 must not make you abandon certain instruments. Will proposed new income tax slabs rates benefit senior citizens? Here's the answer The proposed new tax structure does not offer higher tax exemption limit for senior citizens. These individuals can't switch between old and new income tax regimes every year As per budget proposals, an individual has an option to switch between new and old tax regime every year. In order to be eligible to opt for the tax structure as per an individual's convenience, there is one condition that must be satisfied.

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