Finance Minister Nirmala Sitharaman brought a new tax regime last year. But very few people have chosen this option. The reason is that there is no other exemption in NPS other than Rs. 50,000. Some changes can be made in the rules to make the new tax system more attractive. In order to provide relief to the people, tax exemption can be given on Provident Fund (PF) and Leave Travel Concession i.e. LTC..
The new tax system can also be exempted
on donations. Those who give donations in the next budget can get the benefit of deduction. Under Section 80G of the Income Tax, any person, joint Hindu family (HUF) or company, can avail tax exemption on donations made to any fund or charitable institution. The condition is that the institution to which you make this donation must be registered with the government. Donations can be made by check, draft or in cash. But donations of more than 2000 rupees in cash will not get the benefit of tax deduction.
The new system was introduced
last year, the new income tax system was introduced in last year’s budget. Seven tax slabs were built in it – 0%, 5%, 10%, 15%, 20%, 25% and 30%. The old tax rule has four slabs – 0%, 5%, 20% and 30%. In the new income tax system, tax rates on income between 5 lakh and 15 lakh rupees are low, but there is no exemption in this.
Exemptions not available in the
new tax regime: The new tax regime does not include the rebate on investments under section 80C and section 80CCA (Deposit under National Savings Scheme). In this, 70 different types of discounts and deductions have been eliminated. In the old tax system, exemption is given on other tax saving schemes or deposits including EPF, PPF, Mutual Fund, LIC. They do not get benefit in the new system.
