New Income Tax Regime: ITR filing has started, know who should go to the new tax regime?

Filing of income tax returns has started as soon as the new financial year starts. The Income Tax Department itself tweeted that this is the first time that taxpayers have got the facility to pay tax from the first day of the financial year. This tweet was made on April 4, in which it was written that so far 23 thousand ITRs have been filed for the assessment year 2024-25. The facility to file ITR has started, but many employed people are not able to understand whether they should adopt the new tax system or the old one. The new tax system has been made the default option in last year’s budget. That is, a person who has not informed his employer about choosing the tax regime will be taxed as per the new tax regime. Let us know which people should shift to the new tax system and why.

First know what is the new tax system

Under the new tax system for the financial year 2023-24, there will be no tax on income up to Rs 3 lakh. Whereas income up to Rs 3-6 lakh will be taxed at 5 percent. You will have to pay 10 percent tax on income of Rs 6-9 lakh. Income of Rs 9-12 lakh will be taxed at 15 percent. You will have to pay 20 percent tax on income of Rs 12 to 15 lakh. You will have to pay 30 percent tax on income more than Rs 15 lakh.

You get these 3 deductions

Under the new tax regime the tax rate is very low, but very few deductions are available. Only 3 deductions are available in the new tax regime.

1- The first is standard deduction, under which employed people get tax exemption up to Rs 50 thousand.

2- The second deduction is investment made in corporate NPS under 80CCD(2). Under this, employees of private companies can invest up to 10 percent of their basic salary and dearness allowance in NPS and you will get tax exemption on this. Whereas if you are a government employee then this figure for you can be up to 14 percent.

3- Apart from this, the third deduction has been made under 80CCH in Agneepath Scheme. In this, whatever money is invested by the employee or the government in the Agniveer Corpus Fund, it is tax free.

Who should make changes in the new tax system?

If you do not invest much and are not availing the benefits of savings-investment, insurance, medical, NPS etc. under the old tax system, then the new tax system is better for you. Also, if you do not pay rent and your home loan is not in service, the new tax regime will be better for you. In the old tax system, there is tax exemption on all these things up to a certain limit, which makes it attractive, but if you do not take tax benefits on those things, then you will benefit by coming to the new tax system. And income tax will be very less.