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Comparison-of-Deductions-and-Exemptions-under-New-and-Old-Tax-Regime

 

Comparison of Deductions and Exemptions under New and Old Tax Regime

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Introduction-

Particulars

Old Tax Regime

New Tax Regime (From A.Y. 2024-25 onwards)

Total Income available for Rebate

Rs. 5,00,000

Rs. 7,00,000

Standard Deduction

Rs. 50,000 (Allowed)

Rs. 50,000 (Allowed)

Tax Free Salary Income

Rs. 5,50,000

Rs. 7,50,000

Rebate U/S 87A (Maximum Amount)

Rs. 12,500 *

Rs. 25,000 **

HRA Exemption

Allowed

Not Applicable

Leave Travel Allowance (LTA)

Allowed

Not Applicable

Food Allowance

Allowed

Not Applicable

Exemption on Leave Encashment u/s 10(10AA)

Allowed

Allowed

Exemption on Gratuity u/s 10(10)

Allowed

Allowed

Children education allowance

Allowed

Not Applicable

Other special allowances [Section 10(14)]

Allowed

Not Applicable

Exemption on Voluntary Retirement  10(10C)

Allowed

Allowed

Professional Tax

Allowed

Not Applicable

Interest on housing loan u/s 24b on self-occupied or vacant property

Allowed

Not Applicable

Interest on housing loan u/s 24b on let-out property

Allowed

Allowed***

Deduction under Section 80C towards contribution to public provident fund, repayment of principal on housing loan, children’s school fees, life insurance premium, etc.

Allowed

Not Applicable

Deduction under section 80CCD (1B) for Employee's (own) contribution to NPS

Allowed

Not Applicable

Deduction under section 80CCD (2) for contribution to NPS

Allowed

Allowed

Deduction under section 80D towards medical insurance premium

Allowed

Not Applicable

Deduction under section 80E for Interest on education loan

Allowed

Not Applicable

Deduction under section 80EEB for Interest on Electric Vehicle loan

Allowed

Not Applicable

Deduction under section 80G for donation to political party/trust etc

Allowed

Not Applicable

Deduction under section 80TTA & 80TTB for Interest on Saving Bank

Allowed

Not Applicable

Deduction under section 80U for Disability an Individual

Allowed

Not Applicable

*A resident individual with taxable income up to Rs. 5,00,000 will be eligible for tax rebate under section 87A of Rs 12,500/-(Maximum).

**A resident individual with taxable income up to Rs. 7,00,000 will be eligible for tax rebate under section 87A of Rs 25,000/-(Maximum).

*** In the new income tax regime, individuals can claim interest on home loans for let-out property only up to the amount of their rental income declared under the head house property income.

 


Points to be Noted-
  1. The setting off of losses from house property income- As per the new income tax regime, losses from house property can only be set off against other income from house property. Moreover, losses from income from house property cannot be carried forward to future years for set off in the new income tax regime.
  2. No claim of home loan Interest on Self Occupied House Property:Individuals, who have taken a home loan on their self-occupied property and are paying interest on it, cannot claim that interest deduction under Section 24(b).
  3. Deduction for first-time Home buyers Deduction under section 80EE & Section 80EEA gives relief on interest paid on home loans for first-time home buyers. This deduction is no longer available for taxpayersfollowing the new income tax regime.
  4. Following deductions and exemptions not allowed for business income:
    • Additional depreciation under section 32
    • Investment allowance under section 32AD
    • Sector-specific business deductions under section 33AB and 33ABA
    • Expenditure on scientific research under section 35
    • Capital expenditure under section 35AD
    • Exemption under section 10AA for SEZ units
  5. Setting-Off Business/Profession Loss-

In the case of a business income, an individual/ HUF cannot set off the brought forward business loss or unabsorbed depreciation. Further, they cannot carry forward these B&P losses and unabsorbed depreciation relating to deductions/exemptions withdrawn under clause (i) of sub- section (2) of section 115BAC.

In simple terms, you can carry forward short-term & long-term capital losses and derivatives trading losses in the new tax regime. Since, only the losses relating to deductions & exemptions withdrawn under clause (i) of sub-section (2) of section 115BAC cannot be set off or carried forward, for eg: House property losses, additional depreciation, etc.






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