Old Vs New Tax Rule News: The 'magic number' for people earning 20 lakh rupees is 3.75 lakh rupees. That is, one can get a better return than the old tax slab by investing above the magic number. However, if someone does not want to invest, then the new tax slab will be good for them.
Old Vs New Tax Rule News Many questions have arisen in people's minds about the new and old tax systems. Is everyone curious to know every detail about the new system of income tax? Do people want to know who is good for the new tax slab? If the income is ten lakh rupees, then choosing which tax slab will prove to be a profitable deal. You will get answers to all such questions today. Read this article to clearly understand New Tax Slab and Old Tax Slab.
Benefits of New Tax Slab? According to experts, the new tax slab is a good experiment, as the government had earlier introduced a new tax slab in 2020. Which did not get a very good response. So now that it has been changed and improved, surely the new tax slab is a better option for the larger population. Experts say that if there is no investment, then people should opt for the new tax slab at any cost, due to which they will have to pay less tax.
But if you can avail of all kinds of deductions, then only the old tax slab can prove to be good. A magic number is suggested for each income group. If the taxpayer touches the same investment or tax exemption number as this magic number every year, he is going to get more benefits than the old tax slab. The old tax slab still gives the benefit of tax exemption. There is no such provision in the new tax slab.
If one's annual income is 10 lakh rupees, then 60 thousand rupees will have to be paid as income tax as per the new tax slab. Apart from this, there is a 4 percent cess regime. But if a person earning 10 lakhs opts for the old tax slab and gets all the income tax exemptions, then only the old tax slab will be beneficial to him. Because in the old tax system tax exemption up to Rs.1.50, lakh is available under 80C.
Apart from this, a deduction of Rs.2 lakh on a home loan, an additional deduction of Rs.50 thousand by investing in NPS, and paying a premium for medical insurance can bring one's income fully under tax exemption. He suggested a magic number for each income group and experts said the old tax slab would be a lucrative deal for those investing above this magic number. He said that if the annual income is Rs 10 lakh, and the deduction (income tax exemption - 80c, NPS, home loan) is more than 2.50 lakh, then it is better to opt for the old tax slab. That is, for a person earning Rs 10 lakh, the magic number is two and a half lakh. the money Similarly, 3.58 lakh rupees is the 'magic number' for people earning 15 lakh rupees. For those earning Rs 20 lakh, the 'magic number' is Rs 3.75 lakh. That is, one can get a better return than the old tax slab by investing above the magic number. However, if someone does not want to invest, then the new tax slab will be good for them.
It is worth mentioning here that Nirmala Sitharaman introduced a new income tax slab in the budget, under which five slabs have been created and 0% tax on income up to three lakh rupees. The biggest thing is that if you earn 7 lakh rupees annually, you don't have to pay a single rupee of tax. Why New Tax Slab is Needed for Govt. According to the Central Board of Taxation, the number of people earning up to Rs 2.5 lakh in returns filed in 2018 was 13. which was 9 percent.
Those whose income was between 2.5 to 5 lakhs was the highest at 49.3 percent. The number of people with an annual income of 5 to 10 lakhs was 26.7 percent. That is, tax exemption up to 7 lakhs and every department will get the benefit of the new tax slab. But it will have about 90 percent of people whose annual income is Rs 10 lakh. As per the new tax slab, where an earlier tax of Rs 2500 was levied on the income of Rs 3 lakh, it has been reduced to zero. Rs 3 to 6 lakh income was earlier taxed at Rs 2,500, which will now be reduced to Rs 15,000, which means a gain of Rs 7,500. Those earning 6 to 9 lakh rupees will get a benefit of 15 thousand rupees compared to now, those earning 9 to 12 lakh rupees will get a benefit of 25 thousand rupees. And those who will save more than 12 to 15 lakh rupees 37 thousand 500 crores of annual income.
