New Income Tax regime: List of tax exemptions under the new system

Produced by: Basudha Das
Designed by: Pragati

Finance Minister Nirmala Sitharaman in her budget speech said that from financial year 2023-24, the new regime is set to be the default tax system.

New Income Tax regime

The new tax regime is touted to be a simpler, less-cumbersome-paperwork alternative to the old tax regime.

New Income Tax regime:
Simple, user-friendly

Not all taxpayers are eligible for this benefit. The benefits are restricted to salaried employees and pensioners. Businesspersons or self-employed professionals cannot avail of the tax break.

New Income Tax regime:
Tax benefits

The Centre introduced a standard deduction of Rs 50,000, which can be claimed on salary and pension.

New Income Tax regime:
Standard Deduction

This is available for both regimes. The proposed new tax regime allows a salaried individual to claim the benefit of standard deduction of Rs 50,000.

New Income Tax regime:
National Pension System

For family pensioners, a standard deduction of Rs 15,000 will be available under the new tax regime.

New Income Tax regime:
Family pensioners

The employer contributes 12 per cent of your basic salary to your employees’ provident fund (EPF) account. This is exempted from tax.

Employers’ EPF contribution

Budget 2023 has proposed that any amount paid or deposited to the Agniveer Corpus Fund under the newly proposed section 80CCH of the Income-tax Act can be claimed as a deduction.

New Income Tax regime:
Agniveer Corpus Fund

Investments up to Rs 1.5 lakh made in the public provident fund (PPF) and Sukanya Samriddhi Yojana are not taxable.

New Income Tax regime:
PPF or Sukanya
Samriddhi Yojna

The old tax regime had a higher tax rate but provided exemptions. Under the old tax regime, individuals can save income tax via various deductions and tax exemptions, Sections 80C, 80D, 80CCD(1b), 80TTA, HRA, and LTA.

Old Tax Regime: Tax reliefs

The official tax calculator launched by the Income Tax department is a handy guide for individuals to choose the regime with lower tax liability.

New Income Tax regime:
How to calculate your tax

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