Key Points
While the income tax rates are relatively lower in the new tax regime, the old tax regime gives you an opportunity to claim higher income tax exemptions and higher income tax deductions, which brings down your taxable income and so lowers your net tax liability..
The old tax regime may work well for many taxpayers to reduce their tax outgo if they are eligible for certain deductions and exemptions..
The comparison of the beneficial tax regime between the old and new tax regimes in India in terms of tax-saving opportunities depends on various factors, including individual income levels, eligible deductions, investment preferences, liquidity, emergency funding requirement, etc, says Surana...
This is where an additional Rs 50,000 investment option under Section 80CCD (1B) gives you a real opportunity to invest in NPS, over and above the Rs 1.5 lakh limit, and enjoy income tax deduction as well.. 5.Helps you save income tax on higher income with eligible allowances If you are living in a rented accommodation and receiving house rent allowance (HRA) as a part of your salary, this helps you get substantial tax saving..
The list of deductions and exemptions under the old tax regime is quite long and applies to select taxpayers if they meet specific conditions.. 8. Maximising your tax saving helps in wealth building Every penny that you can save from your hard-earned money is a penny earned well, especially when it comes to taxes..
