How do I file my new tax regime?
The Central Board of Direct Taxes (CBDT), via a notification last year clarified that individuals opting for the new tax regime for FY 2020-21 will have to do so by filling and filing a new form, called Form 10-IE. The new form i.e. Form 10-IE has been notified by the government.
What is claimable under new tax regime?
The standard deduction, professional tax and entertainment allowance on salaries. Leave Travel Allowance (LTA) House Rent Allowance (HRA) Minor child income allowance.
Should you switch to the new income tax regime?
If your tax-saving investments/deductions are Rs 2 lakh, the New Regime will be beneficial for you for income above Rs 12,25,000. The New Regime would be beneficial only up to income level of Rs 15 lakh, if you fail to match the tax-saving investments/deductions up to Rs 2.5 lakh.
Should I opt for old or new tax regime?
The net tax benefit forgone is higher than the tax liability of Rs. 62,500 under new scheme. For those in 30% tax slab the tax effect of the benefit forgone @ 30% would be 1.20 lakh against the tax saving of Rs. 37,500 accruing by opting for new regime.
What is difference between new and old tax regime?
The new tax regime in contrast to old tax regime is without the deduction and exemptions allowed in old taxation regime. But here the advantage is lower tax rate. So the new tax regime does not offers salaried people with standard deduction benefit, HRA or house rent allowance, LTA or leave travel allowance etc.
Can I change old and new tax regime?
Effectively, you can switch between new and old tax regime at the time of filing ITR. … CBDT also clarifies that even if one opts for New Tax Regime and the same intimation is made to employer or Deductor, it shall be only for the purposes of TDS during the previous year and cannot be modified during that year.
Is PF included in new tax regime?
Under the existing income tax laws, the employer’s contribution to the EPF account of an employee up to 12% remains tax-free. If it is above 12%, it becomes taxable. This provision is same under the new as well as old tax rates.
Income Tax deduction on EPF Contribution.
|Taxable slab||Existing Tax Rates||New Tax slab (2020-21)|
|Above 15 Lakh||30%||30%|
Can I change tax regime?
Salaried individuals can choose between the old or new scheme at the time of making their tax declaration to their employer for the purpose of TDS. However, he is free to change the option and select another one, at the time of filing the ITR.
Is 80G allowed in new tax regime?
The government has allowed for a 100% tax deduction under section 80G for the donations made to the PM CARES Fund. … For the FY 2020-21, an individual or HUF making the donation can also claim deduction under the new optional tax regime.
Which regime is better for income tax?
Scenario 3: Someone availing all major exemptions and deductions
|Income Tax Calculation (Old vs. New Tax Regime)|
|Old Tax Regime (₹)||New Tax Regime (₹)|
|a) Annual Income||20,00,000||20,00,000|
|b) Standard Deduction||-50,000|
|c) Section 80C (EPF +ELSS Mutual fund)||-1,50,000|
Will old tax regime be discontinued?
The salaried people have right to choose between old tax regime or new tax regime every year but the person with business income cannot go back to the old regime once he opts for new regime unless you discontinue your business.
Is 80C removed in 2020?
[Budget 2020] Tax Rates Lowered But HRA, 80C, and INR 50,000 Standard Deduction Gone. … Further, those with an annual income of INR 10-12.5 lakh will pay 10 percentage points less in taxes, while income of INR 12.5-15 lakh will get a 5 percentage points concession from the current applicable tax rates.
Which tax regime is better for 7.5 lakhs?
Looking at the reduction in the tax rates in the new regime, the first reaction would be that the new system looks better. However, with these cuts, someone with Rs 7.5 lakh income will have to pay Rs 25,000 and for those who are earning Rs 10 lakh income, the tax saving will be Rs 37,500.
Which tax regime is better for 15 lakhs?
If he chooses the old rates, he can deduct Rs. 1.5 lakhs under Sec 80C. His taxable income now is Rs.
Old vs New: A Comparison For Different Slabs.
|OLD RATES (with exemptions)||ANNUAL INCOME||NEW RATE (without exemptions)|
|20%||Rs. 7.5 – 10 lakh||15%|
|30%||Rs. 10-12.5 lakh||20%|
|Rs. 12.5-15 lakh||25%|
|Rs. 15 and above||30%|