New tax regime: Why is it more beneficial for taxpayers? Checking details | Mint

The submission of ITR 2024-25: The highest tax rate of 30 percent kicks in when the annual revenue is over £ 15 lakh in the new tax regime. In addition, taxpayers are also entitled to claim a higher standard deduction as well. New tax regime offers concession tariffs as charged in the old tax regime. There are numerous benefits to choosing the new tax regime over the old tax regime. One of the main reasons is the tax rates that are lower compared to the old tax regime. The highest tax rate under the new tax regime is 30 percent for those earning more than £ 15 (for FY 2024-25). For those who earn between £ 12 and 15 Lakh, the tax rate is 20 percent, while those who earn between £ 10 and 12 Lakh are the tax rate 15 percent. While announcing these changes, Finance Minister Nirmala Sitharaman said on July 23, 2024, that the salary employee under the new regime would save up to £ 17,500 in income tax. In contrast, under the old regime – 30 percent tax rate kicks in when revenue per year crosses £ 10 lakh. About 73 percent of taxpayers have already selected for the new tax regime, while CBDT chairman recently said there are expectations that 90 percent taxpayers will choose for the new tax regime from the following year. Standard deduction deduction for the salary employees was raised from £ 50,000 to £ 75,000 last year, while the deduction allowed under the old tax regime is still £ 50,000. Deductions allowed under the new tax regime, although most general deductions are not allowed in the new tax regime, there are some that are still given. I. deduction of expenses by employers versus NPS under section 80CCD (2): It was increased to 14 percent of the employee’s salary in 2024 from 10 percent earlier. Ii. Deduction under section 80Cch for contributions to the agnivation corpus fund. Iii. Deduction under section 80jjaa: This is intended for employers who enable coming companies to claim a 30 percent deduction for additional employee recruitment costs for three consecutive assessment years. Other key deductions It is remarkable to mention here that other key deductions such as those given under Articles 80C, 80D, 80DD and 80g are not allowed in terms of the new tax regime. Meanwhile, those who have chosen to submit their tax return under the old tax regime are entitled to claim them. Income tax computer if you have some investments in tax saving instruments and are uncertain about which regime will be more advantageous – old or new – you can use income tax computer where you can enter all the details regarding revenue and investments to get to the tax calculation. If tax calculated under the old tax regime is higher, you can choose for it. Otherwise you can go for new tax regime. Visit here for all personal finance updates. First published: 27 Apr 2025, 12:16 pm Ist