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The New Tax Regime does not offer exemptions and deductions, like HRA, LTA, 80C, 80D, etc., available under the Old Tax Regime, except a few.
The new tax regime offers a standard deduction of Rs 50,000 for salaried individuals. Under the New Tax Regime, one can enjoy tax-free income up to Rs 7.5 lakh after applying the standard deduction and tax rebate.
Family pensioners can also benefit from the standard deduction. It’s important to note that pensioners will only receive the standard deduction benefit if their pension is taxable as salary income. If someone designates their pension as income from another source, they won’t be eligible for the Standard Deduction benefit.
One can claim a deduction for employer’s contribution to your National Pension System (NPS) account under Section 80CCD(2). This includes; Deduction For Additional Employee Cost, Family Pension Income and Exemption On Leave Encashment.
Under this Tax regime, most popular deductions under Chapter VI-A, like 80C, which include investments in PPF, ELSS, and 80D, which includes health insurance premiums, etc., are not available.
Under the new tax regime, deduction for interest paid on housing loans is not allowed on self-occupied or vacant properties u/s 24(b).
Compiled by Syed Muskan
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