Old Vs New Tax Regime: Taxpayers currently get two options to pay income tax. The government is constantly trying to make the new tax regime attractive.
Along with this month, the new financial year 2023-24 (FY24) has started. Along with this, everyone, especially the people coming in the taxable slab, have started trying to save maximum tax. Two types of tax system have made this task more difficult for taxpayers than before. Let us know how many benefits are available in which system…
The government is trying to make the new tax regime attractive. In future, the plan of the government is to keep only one tax system. The government made some changes in this budget to popularize the new tax regime. Now under the new tax regime, the benefit of standard deduction will also be available.
After Standard Deduction, taxpayers in both tax regimes get the facility to claim exemption of up to Rs 1.50 lakh. This means that your taxable income gets reduced by Rs 1.50 lakh.
In the old tax regime, there is a facility to claim exemption on home loan interest as well, whereas in the new tax regime, there is no facility to claim exemption on home loan interest.
If you live on rent, you can claim HRA under the old system. Taxpayers do not even get this benefit in the new tax regime.
In the old tax regime, it is possible to avail the benefit of both interest on home loan and HRA. In this way, you can save maximum tax by filing both the claims together.
Under the old tax regime, many types of exemptions and deductions including 80C, 80D, 80CCD are available. However, the old tax regime is beneficial only if you claim maximum deductions. For this, you will have to save and invest according to your income with the help of a tax advisor.
