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