Deductions in the New Tax Regime of the Budget 2023-24|What are the new tax regimes for the 2023-
24 financial year (AY 2024-25)?
The Union Government introduced a new tax regime pursuant to Section 115BAC in the 2020 Budget with concessional tax rates.
In the Finance Budget 2023 income tax regime U/s 115 BAC, the government has introduced the Below given main changes for the financial year (F.Y) 2023-24:
Income tax slabs for the A.Y.2024-25
Up to Rs. 3 lakhs NIL
Rs. 3 lakhs- Rs. 6 lakhs 5% of.
Rs. . 6 lakhs- Rs. 9 lakhs 10%
Rs. . 9 lakhs- Rs. 12 lakhs 15%.
Rs. 12 lakhs- Rs. 15 lakhs 20%.
Rs. . 15 lakhs and above 30%
Education Assignment 4% p.a. of Taxable Income
Increase in the Tax Discount Limit
Full income tax exemption up to Rupees Seven lakhs is provided under the new tax regime Under Section 87A of the Income from the Budget 2023
Limit of Tax Waiver of the Old Tax Regime for the 2023-24 Fiscal Year Limit of the Tax Reduction of the New Tax Regime for the 2023-24 Fiscal Year
Rs. 5 lakhs from Rs. 7 lakhs
You are not required to pay taxes if you claim the standard deduction of Rs. 50,000 with a capital limit of Rs. 7.5 lakhs.
Increase in the Basic Tax Exemption Limit
The basic tax exemption threshold of Rs. 2.5 lakhs under the old tax regime increased to Rs. 3 lakhs under the new tax regime.
Age types Basic tax deduction limit u/ Old tax regime for the 2023-24 tax year Basic deduction limit u/ New tax regime for the 2023-24 tax year
< 60 years old Rs. 2.5 lakhs from Rs. 3 lakhs
60-80 years R$. 3 lakhs
> Annual Years Rs. 5 lakhs
The new exemption limit will apply from April 1, 2023, if you opt for a new tax regime.
Standard Tax Deductions
Salaried people are eligible to claim the benefit of standard deductions of Rs. 50,000 under the new tax regime.
Family pensioners can claim standard deductions of Rs. 15,000 under the new tax regime.
It is highlighted that The new Income Tax Regime is the default choice
The new tax regime is the default option for an income tax deduction by the deductor and the Internal tax collection.
Meaning of exemptions and deductions in
the new Tax Regime
Let’s look out for the focus keywords as
given in the list below.
Deductions in the New Tax Regime
Refers to expenses or investments made by the taxpayer that can be deducted from their gross gross income to arrive at taxable income
Deductions can help reduce an individual's or business's taxes
Exemptions from the New Tax Regime
These are the income or investments made by the taxpayer that are not included in the calculation of their taxable income.
No Exemptions and Deductions under the
New Tax Regime
Below, we will study the main exemptions
and deductions of the new tax regime that cannot be claimed by individuals:
• Tax Deductions and Exemptions not required under the new Tax Regime
• Under Section 80TTA and Section 80TTB
• Exemption Under Chapter VI-A as per the Income Tax Section 115 BAC
• Employment tax
• Entertainment Subsidy and Salaries
• Housing Rent Assistance (HRA).
• Travel Assistance (LTA).
• Assistant's Allowance
• Child educational assistance
• Youngest child's income allowance
• Interest on Personal Housing Loan/Unoccupied Property
• Other special measures u/ Section 10(14).
• Employee contributions to the NPS account
• Donations to Political Parties / Foundations
There are some deductions and exemptions
under the new tax regime, which are as follows:
List of exemptions from the new tax regime
• Transport allowances w.r.t. Disabled Person (PHD).
• Transport allowance
• Travel/tour/transfer fee
• Requirements for Governmental Purposes
• Voluntary Retirement Scheme Exemption under Section 10(10C).
• Gratuity Amount u/ Section 10(10) .
• License Billing u/ Section 10(10AA) .
• Interest on Housing Loan on Borrowed Property u/ Section 24
• Kino Donations Rs. 5,000
• Employer Contributions to Employees' NPS Accounts u/ Section 80CCD(2)
• Additional employee costs u/ Section 80JJA
• Standard Family Pension Deductions u/ Section 57(IIA).
• Deductions and Deposits into the Agniveer Corpus Fund u/ Section 80CCH(2).
• Deductions from corporate income are not provided under the new tax regime
Let's see the various exemptions and
deductions in the new tax regime available to companies:
• Exemptions/Deductions Cannot be claimed by companies covered by the new Tax Regime
• Additional depreciation u/ S 32
• Investment Assistance u/ Section 32AD
• Deductions by sector for companies u/ Section 33AB and 22ABA
• Research and Development Expenses u/ Section 35
• Capital Expansion Expenses u/ Section 35AD
• Is Section 10AA for Units in SEZ
• Depreciation and Losses in Business
Comparison of Deductions in the Old vs.
New Regime for the 2023-24 fiscal year
Below shows a comparative analysis of the deductions available in the old vs new tax regime:
Exemptions / Deductions available Old tax regime New tax regime
Standard deductions of Rs. 50,000 YES YES
Employment Tax/ Employment u/ Section 10(5) YES NO
Housing Rent Assistance (HRA) u/ Sec 10(13A) YES NO
Free food and beverage exemptions through
Food vouchers/coupons YES NO
Deductions of up to Rs. 1.5 lakhs
U/ Chapter VIA for investments like
U/ Sec 80C, 80CCC, 80CCD, 80DD, 80DDB,
80E, 80EE, 80EEA, 80G, etc. YES NO
Deductions u/ Sec 80CCD(2) for Employer
Contribution to Employee NPS Accounts YES YES
Deductions u/Sec 80CCD(1B) Rs. 50,000 YES NO
Medical insurance premium u/sec 80D YES NO
Features of this Excel Utility:-
1) This
Excel utility prepares and calculates your income tax as per the New Section
115 BAC (New and Old Tax Regime)
2) This
Excel Utility has an option where you can choose your option as a New or Old Tax
Regime
3) This
Excel Utility has a unique Salary Structure for Government and Non-Government
Employees Salary Structure.
4) Automated
Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from the
F.Y.2000-01 to F.Y.2023-24 (Update Version)
5) Automated
Income Tax Revised Form 16 Part A&B for the F.Y.2023-24
6) Automated
Income Tax Revised Form 16 Part B for the F.Y.2023-24
