After new Budget presentation confusion is going everywhere, why two types of regimes are being forced to to the tax payers? One regime should be proposed with all hopes of benefits to the tax payers?

Ans: Hi
The difference between the old and new tax regime is that many deductions and exemptions are not available if an individual opts for the new tax regime.

Standard deduction, PT deduction, Mediclaim, Life Insurance, PF, NPS, Donations etc., are some of the common deductions that would not have been available to an individual opting for the new tax regime. The benefit that the individual would get by opting the new tax regime is that she / he would get lower rates of tax slab as compared to an individual opting for old tax regime.

With the new budget proposals, the FM intends to extend atleast 3 distinct benefits to individuals opting for the new tax regime.

1. Standard deduction would be available to be claimed
2. Slab rates of tax has been rationalized (improved) to give better tax relief to the individual
3. Individuals opting for new tax regime have got enhanced Nil tax window of Rs. 7 Lakhs as compared to old tax regime limit of Rs. 5 Lakhs. As your income even after the standard deduction would be above Rs. 7 Lakhs, this benefit is not really applicable to you.

If we look at an income of Rs. 10 Lakhs with standard deduction of Rs. 50000; you would pay Rs. 52,500 under the new tax regime (current budget proposal) as compared to Rs. 67,500 under the new tax regime (last year budget). So effectively comparing apple to apple, you have an additional saving of Rs. 15,000 in taxes

Ans: Government is trying to give benefit to small tax payers through new tax regime.

Ans: New tax regime is beneficial if all the tax benefits are not taken. For e.g. if income is 30 lacs and deductions u/s 80C is 150000 taken, tax liability will be Rs.600000 under new tax regime and under old it will be 667500.

However, if person take PPF benefit of 1.5 lac, 25k in mediclaim, housing loan interest deduction 2 lacs, 50k standard deduction from salary; tax liability under old regime will reduce to 585000.

Ans: No specific change for senior and very senior citizen. However, benefit of new slab rate and increased limit of rebate is available.

Ans: I feel, your tax liability shall be less in New Tax Regime, so I suggest to adopt for the same.
Most welcome for any further clarifications. Thanks.