As the new budget has unveiled, the new tax regime states that the individuals earning a salary of over 13 lakhs a year would save some money. Under the previous regime, the individuals would have to pay a tax of Rs. 1.45 lakh but now, there would be saving of Rs. 5,200 as the individuals would have to pay Rs. 1.43 lakh. The individuals can avail deductions of up to Rs. 2 lakhs will save on their tax outgo if they opt for the new tax regime proposed in the budget. The old tax system will be beneficial as the tax outgo will be less compared to the new structure.
The reports suggest as many as 5.3 crores taxpayers out of 5.78 crores claimed the deductions. These deductions including standard deduction, provident fund, home loan interest, contribution to a national pension scheme, life insurance, medical insurance, etc., were claimed while filing income tax returns. The data states that almost 90 percent of taxpayers actually claimed a deduction of less than Rs. 2 lakhs.
In the Budget, Finance Minister Nirmala Sitharaman proposed new tax slabs of 15 percent and 25 percent in addition to the existing 10, 20 and 30 percent. For individuals with annual income up to Rs. 2.5 lakh are exempted from the tax slab.
On a salary of Rs. 14 lakhs a year, the saving would rise up to Rs. 10,400 and for those earning more than Rs. 15 lakhs a year, the saving would be Rs. 15,600. The saving would only be valid should the individual claim the deduction up to Rs. 2 lakhs.