Union Budget 2020 highlights Photograph:( WION )
The important tax breaks that will not be available under the new regime include the benefits of section 80c
Finance minister Nirmala Sitharaman proposed to bring a new personal income tax regime where income tax rates will be reduced but several exemptions will be removed.
Now, what will you lose if you opt for the new lower income tax regime.
For starters, those opting for the new tax regime will have to forego 70 out of 100 exemptions currently enjoyed by taxpayers.
The important tax breaks that will not be available under the new regime include the benefits of section 80c, investments in provident fund, national pension scheme and life insurance premium.
There will be no exemptions under section 80d that includes medical insurance premium. Also, you will have to let go off tax breaks on house rent allowance and the interest paid on housing loan.
Taxpayers will have to forego tax breaks for the disabled and charitable donations. So now, the big question is that will the new personal tax regime really bring substantial tax savings for most?
Under the new tax regime, the individuals can opt to pay tax at the reduced rates without claiming the various tax exemptions and deductions.
The individuals will have to work out their liability under the old and new tax regime before deciding which one is more beneficial.
In the list of new income tax regime, you are likely to lose on: Leave travel concession, house rent allowance, provident fund, national pension scheme, life insurance premium, interest paid on housing loan, interest paid on higher education and disabled and charitable donations.