What is the Standard Deduction?
Enjoy the benefits of the normal
U/s 115 BAC exemption in the new tax regime for F.Y.2023-24 as per Budget 2023|
The term standard deduction refers
to the tax-free portion of income that can be used to reduce your taxes. Now,
income taxpayers can take advantage of the conventional exemption in the tax
declaration even after the declaration of the ITR of the new tax regime.
The standard deduction under the new tax regime U/s 115 BAC
The standard deduction benefit available to salaried workers and pensioners (including family pensioners) was introduced under the new tax regime. A person opting for the new tax regime for the 2023-24 tax year can claim a standard deduction of Rs 50,000. Altho the Family pension holder opting for the new tax regime may be able to claim a standard deduction of Rs 15,000. Zero income tax up to Rs 7 lakh
A person opting for the new tax
regime for the 2023-24 tax year will have to pay zero tax if the taxable profit
does not exceed Rs 7 lakh in the tax year. If, any taxpayers whose taxable
income is up to Rupees Seven lakh and Fifty thousand, may claim the deduction
of a standard deduction of Rs 50,000. This will reduce the taxable income to Rs
7 lakh and hence he will have zero tax liability.
If you choose to pay lower tax
rates under the new tax regime, you should be aware of Section 115BAC of the
Income Tax Act of 1961. The government introduced Section 115BAC, which took
effect in the financial year of 2020-21 (AY 2021-2020).
It should be noted that the option
for the new tax regime implies that taxpayers waive about 70 tax exemptions and
deductions allowed by the old tax regime. Thus, individuals who opt for this
new tax regime will have to give up these exemptions and deductions in exchange
for lower rates.
You may also Like- Automatic CalculateIncome Tax Arrears Relief Calculator U/s 89(1) with Form 10E from theF.Y.2000-01 to F.Y.2023-24 (Update Version)
Non-applicable tax deductions and credits under the new tax regime Some of the main non-applicable tax deductions and credits under the new tax regime or Section 115BAC are:
- Exemptions under Sections 80C, 80D and 80E, except
Section 80CCD(2) and Section 80JJAA
- Deduction from interest income under Section
80TTA/80TTB
- Professional and entertainment tax allowance
- Travel Subsidy Exemption
- House Rent Subsidy
- Interest on home loans under Section 24
- Employee contribution to NPS
- Donation to political party/belief
Exemptions
and Deductions Made under the New Tax Regime
Some of the key exemptions and
deductions available under the new tax regime or Section 115BAC include:
- Transport assistance for people with special needs
- Tea Gifts for Rs.5,000
- Employer contribution to NPS
- Standard deduction of Rs. 50,000 (applicable in
fiscal year 23-24)
- Exemption under Section 57(IIA).
Features of this Excel utility:-
1) This Excel utility perfectly prepares your income tax according to your U/s 115BAC option.
2) This Excel utility has a completely revamped Income Tax section as per Budget 2023
3) Computerized Income Tax Form 12BA
4) Automatic computation Income Tax Exemption rented house U/s 10(13A).
5) Individual salary structure according to government and private group salary model
6) Individual Pay Sheet
7) Individual tax datasheet
8) Automatic Income Tax Form 16 Part A&B revised for the financial year 2023-24
9) Automatic Income Tax Form 16 Part B revised for the financial year 2023-24
