Question: Which Slab Is Better For Income Tax?

Is new tax regime beneficial?

The new income tax rate is beneficial for people with low investments in policy schemes.

It offers seven lower tax slabs.

This offers better flexibility to taxpayers to choose a different tax regime as per their requirement.

The exclusion of 70 exemptions also helps in containing income tax frauds..

Is 80c applicable in new tax regime?

Under the new tax regime, an individual cannot avail tax benefit under section 80C on the contribution made to his/her PPF account. … Further, any maturity amount received from the PPF account will be exempted from tax in the new tax regime.”

Can I change from new tax regime to old?

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.

How do I choose between old and new tax regime?

Based on your net taxable income post exemptions/deductions, calculate total income tax under old as well as new regime. Apart from taxable income, your lifestyle, life stage, short- and long-term priorities along with financial goals are excellent parameters to decide what type of tax regime you should opt for.

Which option is better for income tax?

“If the salaried individual is claiming deductions under section 80C, 80D (medical premium), HRA exemption, LTA exemption and deduction of interest paid on housing loan taken for self occupied property up to permissible limits, he is is likely to be better off in the existing personal tax regime,” said Shalini Jain, …

What deductions are not allowed in new tax regime?

The important tax breaks that will not be available under the new tax regime include Section 80C (Investments in PF, NPS, Life insurance premium, home loan principal repayment etc.), Section 80D (medical insurance premium), tax breaks on HRA (House Rent Allowance) and on interest paid on housing loan.

Is new or old tax better?

The pros of the new regime are as follows: Reduced tax rates and compliance: The new regime provides for concessional tax rates vis-à-vis tax rates in the existing or old regime. Further, as most of the exemptions and deductions are not available, the documentation required is lesser and tax filing is simpler.

How much house rent is tax exempt?

An IllustrationConditionTax Exemption1Rs 60, 000 (@Rs 5000 Per Month, according to the HRA exemption 2016-17 rules, earlier the limit was Rs 2, 000)2Rent paid i.e. 1.5 Lakhs – 10% of the total annual income, i.e. Rs 40, 000= Rs 1, 10, 000325% of the total income= Rs 1 LakhNov 18, 2020

What is the income tax slab for AY 2020 21?

Income tax slab rate applicable for New Tax regime – FY 2020-21.Income Tax SlabNew Regime Income Tax Slab Rates for FY 2020-21 (Applicable for All Individuals & HUF)Rs. 5.00 lakhs- Rs 7.5 Lakhs10%Rs 7.5 lakhs – Rs 10.00 Lakhs15%Rs 10.00 lakhs – Rs. 12.50 Lakhs20%Rs. 12.5 lakhs- Rs. 15.00 Lakhs25%4 more rows•6 days ago

Is 80c removed in 2020?

[Budget 2020] Tax Rates Lowered But HRA, 80C, and INR 50,000 Standard Deduction Gone. In the Union Budget 2020, finance minister Nirmala Sitharaman proposed a new tax regime with lower tax rates for different income groups. … However, all without deductions.

Which tax regime is better for 20 lakhs?

On the other hand, if the total tax-exemptions and deductions claimed are less than Rs 2.5 lakh, then the individual would be better off opting for the new tax regime….Synopsis.ParticularsTax payable in Existing RegimeTax payable in New RegimeGross Salary20,00,00020,00,000Standard Deduction-50,000-8 more rows•Feb 21, 2020