Tax Saving Tips: 7 ways you can save your money under new tax regime

New Tax Tegime:  Tax planning is most important to minimise your taxes as it helps you save money. The Income Tax Act allows taxpayers to avail deductions for a variety of investments, savings, and expenditures made within a given fiscal year.
 
There are two tax regimes under which to file your income tax return since the new tax regime was launched in the 2020 budget. When it was launched, you could choose between the old and new tax regimes, but after Budget 2023, the new tax regime has become a default option. This means, as a new taxpayer, your income tax will be filed under the new tax regime automatically.
 
Although people like to choose old tax regimes, there are many ways to save tax under new tax regimes as well. This has become an attractive option after some changes were made in the last budget.
 
Here's how you can save tax under the new regime.

Deduction under NPS

Section 80CCD(2) allows for a deduction for the employer's payment to NPS. This benefit is only accessible to salaried employees, not self-employed persons. An employer may contribute to NPS even if they have already contributed to PPF and EPF funds. The contribution given by the employer may equal or exceed the amount made by the employee. 
If you work for the central government, you can claim up to 14 per cent of your employer's compensation (Basic+DA). Non-government employees, on the other hand, can claim up to 10 per cent of their pay (Basic+DA). 
 
Your employer's contribution will be withdrawn from your employee payslip and paid into your NPS account. The aggregate employer contribution threshold for PF, NPS, and superannuation is Rs 750,000. 

Standard deduction

A standard deduction of Rs 50,000 is allowed under the new tax regime, irrespective of any tax slab.

Home loan 

The total yearly income spent on repayment of the principal borrowed amount is eligible for Section 80C deductions of up to Rs 1.50 lakh. Section 24(b) exempts the interest component of a home loan from taxation for up to Rs 2 lakh per year.
 
Furthermore, if you rent out the newly bought house, you can deduct the whole interest component from your rental revenue. However, losses cannot be offset against other sources of income above Rs 200,000.
 
You can also claim an additional deduction in your annual tax liability if you are a first-time homeowner under Section 80EEA.

Agniveer Corpus Fund under Section 80CCH(2)

The amount that the employees and the central government contribute to the Agniveer Corpus Fund will be eligible for deduction under Section 80CCH(2).

Family pension

The term "family pension" refers to the sum paid by the employer to the employee's family in the case of the employee's death.
 
Section 57(iia) of the family pension allows a deduction of either one-third of the employee's income or Rs 15,000, whichever is lower.

Conveyance allowance

From FY 2018-19 onwards, the exemption permitted would be Rs 1,600 per month and Rs 3,200 per month for a physically challenged employee commuting from his place of living to his place of work.

Others

Certain exemptions under Section 10 were not allowed under the new tax regimes, but other exemptions like a voluntary retirement scheme, gratuity under Section 10(10), and leave encashment also come under the new tax regime.