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Last Updated: January 16, 2023, 16:16 IST
The previous system provided for exemptions and deductions.
For choosing the best tax regime, a taxpayer can look up several tax calculators. This will let you figure out taxes under both tax systems.
Both the new income tax regime and the old tax slab have advantages and disadvantages, but the one you choose depends on your financial situation and annual income, according to tax experts. While deciding whether to use the old or new tax system, you can compute taxation under both tax regimes using several different tax calculators. The standard deduction, the HRA exemption, and the Section 80C deduction are just a few of the exclusions and deductions that are no longer accessible to taxpayers under the new tax law. We discuss the differences between the old and new tax systems in this article.
Old Income Tax:
The previous system provided for exemptions and deductions. The old tax system separated tax rates into three slabs, which may sound high but can be mitigated by using permissible deductions and exemptions. The majority of the exclusions and deductions were designed to help people who were employed.
Some deductions are available to everyone, including those who don’t have any expenses or payments to make. The individual is entitled to a standard deduction of Rs. 50,000. The salary income is eligible for a standard deduction without any limitations or conditions.
New Tax Regime
The new plan has completely different tax rate slabs without any permitted exemptions or deductions. The new tax plan would unquestionably be a superior option for any taxpayer who is unable to make any investments that save them money on taxes.
Any taxpayer who chooses the New Tax Regime will be qualified to benefit from these tax rate slabs. If someone chooses the New Tax Regime, they will not be able to take advantage of any deductions or exemptions that were available under the Old Tax Regime.
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