You have to decide this month whether you will choose the old option or the new tax regime, so that you can invest accordingly.
There is a chance to invest till March 31 to take advantage of the exemptions given in the Income Tax Act. But before that it is important that we understand the new tax regime implemented for the first time. This will help us to save tax.
You have to decide this month whether you will choose the old option or the new tax regime. If you have less amount to invest then choosing a new option will be beneficial. This will reduce tax rates on you. Whereas if you have enough money to invest, then you can try to trust the old option again. On , Chartered Accountant Harigopal Patidar gave the example of the advantages and disadvantages of both options.
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If there is no investment, it will be beneficial in the new optionThe income from your salary is seven and a half lakh rupees and there is no tax-exempt investment. Then if you try the old option, you will get a standard deduction discount of 50 thousand rupees. Along with this, professional tax will be reduced by Rs 2500, HRA 47500 rupees and PF 100000 rupees. That is, your taxable income will now be 640000 rupees. On this, you will have to pay a total tax of Rs 42120. Whereas if you take a new tax regime on this salary, then you will get tax of Rs 39000 for Rs 750000. That means a savings of Rs 3120.
Harigopal Patidar, Chartered Accountant
This will be an advantage in the old option when you invest
Income from your salary is nine and a half million rupees and you have enough investment. Then if you try the old option, you will get a standard deduction discount of 50 thousand rupees. Along with this, there will be a rebate of professional tax of Rs 2500 and travel allowance of Rs 15000. Also, if you include a rebate of home loan interest 82500, PF 20000, school fee and insurance 70000, home people principal amount 10000, health insurance 10000 rupees, then your taxable income will be 690000 rupees. A tax of Rs 52520 will have to be paid on this. Whereas if you do not have the above investments and adopt the new tax option, then the total tax will be Rs 70900. That is, you will save Rs 17680 by investing.
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You can invest here this month to save tax
If you do not have any investment and you also want to save tax, then you have a chance to invest by 31 March. You can save tax in this one month by making necessary investments in options like life insurance, PPF, tax saving FD and ELSS.