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Are there tax savings for following the Old Tax Regime with exemptions?

Mihir

Mihir Tanna  |1033 Answers  |Ask -

Tax Expert - Answered on Feb 13, 2025

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
Anuj Question by Anuj on Feb 03, 2025Hindi
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What are the tax savings to persons who still want to follow the Old Tax Regime with tax exemptions in this budget?

Ans: There is no change in old tax regime. All the benefits like HRA, Housing Loan, Insurance Premium etc are still available.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Mahesh

Mahesh Padmanabhan  |124 Answers  |Ask -

Tax Expert - Answered on Feb 01, 2023

Asked by Anonymous - Feb 01, 2023Hindi
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Dear Sir, what is the difference between new and old tax regime as per new budget announced? What are the benefits? My annual salary is 10LPA
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

..Read more

Ramalingam

Ramalingam Kalirajan  |8103 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 13, 2024

Asked by Anonymous - Aug 08, 2024Hindi
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how can i save money using new tax regime?
Ans: The new tax regime in India, introduced in the Budget 2020, offers lower tax rates but without the benefit of most deductions and exemptions available under the old tax regime. It’s designed to simplify the tax system and provide an alternative to taxpayers who prefer a straightforward approach to tax calculation.

Comparing Old vs. New Tax Regime
Under the old tax regime, you could reduce your taxable income by claiming deductions under various sections like Section 80C, 80D, HRA, LTA, etc. However, the new tax regime offers a lower tax rate but does not allow most of these deductions.

Here’s a quick comparison:

Old Tax Regime: Allows deductions under various sections like 80C, 80D, HRA, LTA, etc.

New Tax Regime: Offers lower tax rates but without most deductions and exemptions.

Tax Slabs Under the New Regime
The tax slabs under the new tax regime are as follows:

Income up to Rs. 2.5 lakh: No tax

Income from Rs. 2.5 lakh to Rs. 5 lakh: 5% tax

Income from Rs. 5 lakh to Rs. 7.5 lakh: 10% tax

Income from Rs. 7.5 lakh to Rs. 10 lakh: 15% tax

Income from Rs. 10 lakh to Rs. 12.5 lakh: 20% tax

Income from Rs. 12.5 lakh to Rs. 15 lakh: 25% tax

Income above Rs. 15 lakh: 30% tax

Deciding Between Old and New Regime
To decide whether to opt for the new tax regime, consider the following:

Total Income: Higher income levels might benefit more from the lower tax rates in the new regime, especially if you don't claim many deductions.

Deductions Claimed: If you claim significant deductions under the old regime, sticking with it might be more beneficial. If you don’t claim many deductions, the new regime could be better.

Investment Discipline: If you prefer not to invest in tax-saving instruments or if your lifestyle doesn't support certain deductions, the new regime offers simplicity.

Strategies to Save Money in the New Tax Regime
If you decide to opt for the new tax regime, here are a few strategies to maximize your savings:

Income Tax Rebate (Section 87A): If your taxable income is up to Rs. 5 lakh, you can still claim a rebate under Section 87A, which reduces your tax liability to zero.

Avoid Unnecessary Investments: Under the new regime, you are not required to invest in tax-saving instruments like ELSS, PPF, or NSC just for the sake of deductions. This can free up your cash flow for other investments or expenses.

Focus on Direct Investments: You can focus on investments that suit your financial goals rather than being driven by tax-saving needs. This could include mutual funds, stocks, or even building an emergency fund.

Simplified Tax Filing: The new regime simplifies tax filing as you don’t need to track and claim various deductions. This can save you time and reduce the complexity of your tax return.

Optimize Employer Benefits: If you have employer-provided benefits like NPS contributions, you might still want to consider the old regime. However, under the new regime, your take-home salary might be higher since you’re not contributing to tax-saving investments.

Finally
Choosing the new tax regime can simplify your tax planning and may reduce your tax outgo if you don’t rely heavily on deductions. It’s essential to weigh your income, deductions, and financial goals before making the switch. If you're still unsure, you can consult a Certified Financial Planner to evaluate your specific situation and determine the best approach for you.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

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Latest Questions
Nayagam P

Nayagam P P  |4336 Answers  |Ask -

Career Counsellor - Answered on Mar 16, 2025

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My son got 97.56 in general category. Any chances of getting cse at NIT. Regards
Ans: Sitansu Sir, Here is, How to Predict Your Son's Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide

Once the January JEE Main session results are declared, many students and JEE applicants start asking common questions about eligibility for specific institutes (NITs, IIITs, GFTIs, etc.) based on their percentile, category, preferred branch, and home state.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Son's Key Details
Before starting, note down the following details:

Your Son's JEE Main percentile
Your Son's category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
His Preferred institute types (NIT, IIIT, GFTI)
HIs Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch your son is interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Son's Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.
Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your son's expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engieering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your Son's admissions!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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