Are you opting for a new tax regime? | Fusion - WeRIndia

While the deadline for filing income tax returns is approaching, individuals and HUFs who do not need to audit their accounts are rushing to file their ITR.

As you are aware there are two tax regimes. The first one is the old tax regime, and another one is the new tax regime. While the old tax regime has more than 70 tax exemptions and deductions, the new regime does not have all of them. But, compared to the old tax regime, the new one offers lower tax rates. Besides, it has more slab rates.

Many taxpayers are in a dilemma that whether they should opt for the new tax regime or not. Hence, here are some details about both tax regimes to decide which one is ideal for you.

The new tax regime does not allow many exemptions and deductions. Some of them include a leave travel allowance (LTA), house rent allowance (HRA), deduction of ₹15,000 allowed from a family pension, deductions under Section 80TTA or 80 TTB, 80C benefits etc.

Besides, a standard deduction of ₹50,000 is available to all salaried individuals and pensioners under the old tax regime. It is not available under the new tax regime. Hence it is not ideal for those taxpayers who have all these deductions.

Salaried individuals and pensioners have the option of choosing between the two tax regimes in each assessment year as per their convenience. If they opted for the old tax regime in the last financial year, they can switch to the new tax regime in this financial year and so on in the future.

So, taxpayers can calculate their tax burden and choose either of the two that suits them aptly to save the tax as per their activities.

However, business people and professionals do not have that option. They have to choose only one option.

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