Old Tax Regime vs New Tax Regime- Important Points To Checklist Before Deciding

Check followings before opting the New tax Regime

#Income - The tax slab in the new income tax regime starts from Rs. 7 lakh, therefore if you are falling below the threshold then there is no tax.Moreover there is a standard deduction of Rs.50,000 in the new tax regime. Wisely, your income bracket is a major factor in making this decision.

# Tax Saving Investments-

There are no benefits available for the tax saving investments under the new tax regime thus if you have no such investment then mark another tick for it.

# Deduction u/s 80C-

If you have a deduction of Rs.1.5 lakh then the new tax regime would be a better choice but if there is a home loan deduction along with this then it will be better to choose old tax regime as it allows a tax deduction on principal amount up to Rs. 1.5 lakh under section 80C and Rs. 2 lakh under section 24(b) on the interest for self-occupied property which will bring down the tax under the old tax regime.To sum it up, deduction under section 80C along with home loan it is better to tick in front of old tax regime.

# HRA Deduction-

If you want to avail the benefit of HRA then the old tax regime is the regime to opt for.

# Other Exemptions-

Exemptions like Leave travel allowance , house rent allowance , children education allowance, deduction for professional tax , interest on housing loan are not available under the new tax regime whereas a few exemptions like interest paid on housing loan taken for a rented-out property can be claimed as deduction under Section 24(b) under the new tax regime.

# Surcharge-

The maximum rate of surcharge is 25 % in the new tax regime and 37% in the old tax regime so it is better to tick to the new tax regime if you fall into the higher surcharge bracket.

# NPS Deduction-

Under the new tax regime, NPS contributions are available for tax deductions of up to 10% of salary including dearness allowance and further deductions of up to Rs.50,000 under sec 80CCD (1B).

# Income tax Calculator-

This is the best tool and the most searched online tool to help you calculate your taxes according to both the regimes for complete guidance and comparison for which one is more favorable.

Be Wise And Declare Your Preferred Regime

As clearly stated in the union budget it is important to declare the regime an assessee wants to go for in the FY 2023-24 ,in the beginning of the year to their employee otherwise by default you will fall under the new regime.To make the calculation easier we have tax experts who will not only guide you about both the regimes but also calculate your tax payable according to both the regimes with the help of Income tax calculator. If you have any confusion then make a call to our tax expert or visit our website for professional consultation.