Deciding between the New and Old Tax Regimes might be tricky for salaried employees. Don’t worry, this video could help you simplify that decision by comparing their benefits and differences.
First, we’ll discuss the Old Tax Regime. Here, you can claim deductions like HRA, LTA, etc., under Section 80C of the Income Tax Act, 1961. The tax exemption limit here varies by age. It is ₹2.5 Lakhs for those aged under 60, ₹3 Lakhs for senior citizens (60-80 years), and ₹5 Lakhs for super senior citizens (above 80). You’ll also learn that if you choose the New Tax Regime, you will benefit from a tax exemption limit. This is applicable for all age groups, on income up to ₹3 Lakhs.
Next, we’ll discuss the tax rebate applicable in each regime. There’s a tax rebate of up to ₹5 Lakhs in the old regime, while this limit is ₹7 Lakhs in the new regime. But remember, you cannot opt for tax deductions under Section 80 in the new regime.
Finally, we try to answer the question – how to choose? Though the New Regime is now the default, the Old Regime is still an option. You can choose between them based on your taxable income and investments.
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