Choosing between the old and new tax regimes depends on fully comprehending the advantages that are offered. Tax planning options are not eliminated by the new tax system, even though it is frequently described by its simpler slabs and lower rates.
Taxpayers can make an educated decision that best suits their financial circumstances by looking at the remaining provisions, such as the standard deduction, NPS payments, and exemptions for particular groups.
According to AdCounty Media’s Abhinav R. Jain, “the new tax regime still offers savings despite fewer deductions.” “Standard deduction, employer NPS contributions, and specific exemptions for seniors and businesses remain.”
Under the new tax system, deductions that can help taxpayers save as much as possible
Standard Deduction
The term “standard deduction” describes the specific amount that taxpayers can deduct from their overall income to lower the amount of income that is subject to taxes.
This lowers the amount of taxes due by decreasing the taxable income. The new tax system allows salaried people to take a standard deduction. For salaried persons, a standard deduction of ₹75,000 is provided. When FM Nirmala Sitharaman presented the Union Budget 2024 in July, she increased the amount from ₹50,000 to ₹75,000.
National Pension Scheme (NPS)
One government-sponsored pension plan that offers people financial stability after retirement is the National Pension Scheme (NPS). Make a Section 80CCD contribution to NPSF. Up to 14% of your base pay may be deducted for NPS investments. It is still possible to deduct the employer’s National Pension System (NPS) contribution.
Employee’s Provident Fund (EPF)
A government-sponsored retirement savings plan called the Employee’s Provident Fund (EPF) was created to assist salaried workers in saving for retirement and guaranteeing their financial stability after they retire. The Ministry of Labour and Employment’s Employees’ Provident Fund Organisation (EPFO) is in charge of overseeing it. Additionally, the employer’s EPF contribution (12 per cent of base pay) is tax deductible under the new income tax regime.
