How to save tax under the new tax regime - claim these deductions to optimise savings
Taxpayers can also claim the interest paid on the housing loan is deductible from the rental income received from the property, which reduces the taxable income from the property.
Under the new tax regime, a rebate of Rs 7 lakhs has been introduced. With this, people who earn Rs 7 lakh don’t have to pay any tax. (Image credit: Pixabay)
The Central Board of Direct Taxes (CBDT) has issued a new notification regarding the new tax regime. If taxpayers fail to opt for the regime, then the new tax regime will be set as the default regime. Under the new tax regime, a rebate of Rs 7 lakhs has been introduced. With this, people who earn Rs 7 lakh don’t have to pay any tax. If taxpayers have opted for the new regime to get a lower rate that they should also know about deductions that can’t be claimed.
Here is the list of deductions that can’t be claimed under the new tax regime:
- Leave travel concession
- House rent allowance
- Allowance for income of minor
- Standard deduction
- Deduction for entertainment allowance
- SEZ unit exemption
- Deductions under sections 32AD, 33AB, 33ABA
- Deduction for donations or expenses in scientific research
- Deductions under sections 35AD and 35CCC
- Deduction from a family pension.
- Deduction under Sections 80C; 80CCC; employee contribution u/s 80CCD; 80D; 80DD; 80DDB; 80E; 80EEA except those under 80CCD(2) and 80JJAA
Here is the list of deductions that can be claimed under the new tax regime:
- Taxpayers can claim a deduction for interest paid on housing loans taken for a rented-out property under section 24(b).
- Taxpayers can also claim the interest paid on the housing loan is deductible from the rental income received from the property, which reduces the taxable income from the property.
- Taxpayers can claim the benefit of employer contributions to their National Pension System (NPS) account under section 80CCD(2) of the Income Tax Act.
- Taxpayers can also claim a deduction on the new tax regime on the amount received in gratuity. The deduction under the new tax regime for gratuity in a lifetime is Rs 20 lakhs for non-government employees.
- If taxpayers have opted for voluntary retirement, then monetary benefits are eligible for tax exemption. The maximum limit is up to Rs 5 lakh in both the current and the new tax structure.
- Taxpayers who have opted for leave encashment on retirement can avail tax benefit of Rs 3 lakh in the new tax regime
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Written By: Charushree Chundawat
Updated: Wed, Apr 12, 2023
12:32 PM IST
12:32 PM IST
New Delhi, ZeeBiz WebDesk
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