Remember the new tax regime of 2020? Well, if you brushed it away, now must be a good time to revisit.
2023’s union budget revised the new tax regime to encourage it over the existing one. Although the old tax regime stays in the picture, the incentives of the new one seem fulfilling too.
Are you trying to weigh between the income tax old regime vs new regime? Well, let us help you understand the old and new tax regime. Compare and pick the best one based on your income.
With 2023's union budget revamping the new tax regime, it has become the default choice for salaried employees. However, you can opt for the old regime if it fits your goals.
Let’s understand the old and new tax regime.
2020’s new tax regime lost support because of its deductions and exemption limits. But, 2023’s budget improvised to persuade a shift into this regime.
The older regime tops because of the over 70 various deductions. Among these, the 80C offering a reduction of ₹1.5 lakhs on taxable income, HRA, and LTA, are most popular.
These are the offered exemptions:
Hence, this plan reduces the total taxes paid on income.
Now that you know what is old and new tax regime are, it is time to compare the two. Listed below are the advantages and limitations of the income tax old regime vs new regime:
Hence, both the old and new tax regime have their pros and cons. The best regime for you depends solely on previous personal eligibility for exemptions and deductions. Evaluate, compare, and assess the best based on your income and financial preferences.
With both the old and new tax regime in the picture, it is time for salaried employees to assess their financial decisions. The two differ in income tax slab rates, certain deductions, and exemptions.
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Yes. The new tax regime has now become the default choice. This change can be made when filling ITR (Income Tax Return).
Essentially, people with an annual income of up to ₹7 lakhs benefit immensely under the new tax regime. They are eligible for a tax-free income. Besides, people with higher incomes but overall low investments also benefit from lowered tax slabs.