Income tax
Two tax systems are available for taxpayers New Tax Regime and Old Old Tax Regime. Explain that tax rates are low in the new system, but it gets very little deduction and discounts. At the same time, in the old tax system, you get the benefit of a lot of tax exemption and deduction, which can reduce your tax liability significantly.
In such a situation, tax experts believe that if you invest and spend wisely, then the old tax system can still be a better option for you. Let us know what reasons the old tax regime is better than the new tax regime.
Both investment and tax savings together
The old system not only gives you a chance to save tax, but it also inspires you for regular investment. You can take a deduction of up to 1.5 lakhs on PPF, ELSS, Life Insurance, Tuition Fee etc. under 80C, that is, the more you put in savings, the less tax will have to be paid.
Big relief on health and life insurance
If you have taken health insurance, then your premium is also cut. You can get a discount of Rs 25,000 for themselves and family and up to Rs 50,000 for parents (if senior citizens). Also, life insurance also provides relief under 80C.
Extra discount will be given from investment in NPS
In the old system, you can take an additional cut of Rs 50,000 under 80CCD (1B) by investing in NPS (National Pension System). This exemption is available in addition to the range of 80C, which increases your tax savings.
Save thousands of rupees from HRA and LTA
If you live in a rented house and get HRA in salary, then you can also take advantage of it. With the help of HRA, you can save a large part of salary from tax. Also, if you are getting LTA (Leave Travel Allowance), then the money spent on visiting India can also be exempted from tax.
Home loans save both home and tax
If you have taken a home loan, then there is relief in the old tax system on the deduction of interest received on it (up to Rs 2 lakh). This also makes EMI look cheap and tax also has to be paid less. This facility is not in the new tax system.
Relief on studies, savings and donations
If you have taken an education loan, then your interest is also deducted. Also, a discount of up to Rs 10000 is available on the interest of savings account and up to Rs 50000 for senior citizens. There is also a tax exemption on donating to an institution under 80G.
Better option for people with more cuttings
If you are eligible for many deductions such as 80C, 80D, 80ccD, HRA, home loan etc., then your taxable income can be reduced so much that you do not have to pay very little or any tax. Especially for middle class and employed people, this system is more beneficial.
Tax savings will make fat funds
Every year a large amount of tax savings of a few thousand or lakh rupees can be made for you in a long time. The old tax system gives advantage to those who invest with smart planning and long -term thinking.