Last Update: January 16, 2023, 4:16 pm IST
The previous system provided for exemptions and deductions.
To choose the best tax regime, a taxpayer can refer to several tax calculators. This will let you find out taxes under both the tax systems.
Both the new income tax regime and the old tax slabs have advantages and disadvantages, but which one you choose depends on your financial status and annual income, according to tax experts. When deciding whether to use the old or new tax regime, you can calculate taxation under both tax regimes using a number of different tax calculators. Standard deduction, HRA exemption, and Section 80C deduction are just some of the exclusions and deductions that are no longer accessible to taxpayers under the new tax law. We discuss the differences between the old and the new tax systems in this article.
Old Income Tax:
The previous system provided for exemptions and deductions. The old tax system divided the tax rates into three slabs, which may seem high but can be reduced by making use of allowable deductions and exemptions. Most of the exclusions and deductions were designed to help employed people.
Some deductions are available to everyone, including those who don’t have any expenses or payments to make. The individual is entitled to a standard deduction of Rs. 50,000. Salary income is eligible for standard deduction without any limit or conditions.
new tax regime
The new scheme has completely different tax rate slabs without any exemption or deduction allowed. The new tax scheme will surely be a better option for any taxpayer who is unable to make any investments that save them money on taxes.
Any taxpayer who opts for the new tax regime will be eligible to benefit from these tax rate slabs. If a person opts for the new tax regime, he will not be able to avail of any deduction or exemption available under the old tax regime.
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