Recent changes to tax exemptions and allowances, including increased education, hostel, and HRA limits, have made the old tax regime more competitive against the new regime, prompting salaried employees to re-evaluate their choice for the current financial year.
'Among corporates, about 60% of income is now reported under the new tax regime.'
With Income Tax Act 2025 in force, your tax choice can quietly cost you big money if you're not paying attention. Ramalingam Kalirajan explains how
Most think tax-saving deductions exist only in the old regime. But the New one quietly retains 40+ ways to ease your tax load
Review your family emergency fund and replenish it if needed. Revisit financial goals to see if there is any change in timeline or the corpus required.
The old tax regime remains unchanged. 'Taxpayers opting for it will continue to follow the existing slab rates and deductions.'
Master the online ITR filing process and then learn the differences between the old and new tax regimes to pick your best option.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
Some individuals opt for the new regime without a comparative analysis of the tax liability under the two regimes.
'If an individual makes significant financial investments, she should stick to the old regime.' 'If the individual prefers straightforward computation without any tax benefits, the new regime would be suitable.'
rediffGURU T S Khurana answers readers' personal income tax queries.
rediffGURU Vipul Bhavsar answers readers' personal income tax queries.
'Most young taxpayers prefer income tax filing to be flexible yet straightforward.'
In the rush to complete tax-saving investments at the end of the financial year, many taxpayers choose instruments that do not match their long-term financial goals.
>According to the latest RBI data, PPF receipts have already experienced a decline between April 2023 and February 2024. Other schemes like the Sukanya Samriddhi Account and National Savings Certificate are also witnessing reduced inflows.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
The choice of tax regime dictates how your income will be taxed. If you don't make the right pick, you might end up losing money.
Your financial goals are of utmost importance and the tax saving is an added incentive, advises Dwaipayan Bose.
Finance Minister Nirmala Sitharaman on Wednesday said the government has made the new income tax regime more attractive for taxpayers and has thus brought about 'substantial changes' in its structure for the benefit of the middle class. The Budget 2023-24 has proposed changes in the optional tax regime, which was introduced in 2020-21. Speaking to reporters after presentation of the Budget, Sitharaman said the country has been waiting for a direct tax regime which is simplified and easy in compliance.
There are a number of steps taken that will leave more money in the hands of the taxpayers.
These include the reduction in tax rates under the new tax regime, increase in standard deduction, allowing tax collected at source to be adjusted against tax deducted at source from salaries, notes Harsh Roongta.
Indian companies are increasingly turning to share buybacks as a preferred payout strategy, driven by recent tax framework changes that make them more tax-efficient for non-promoter shareholders and a fall in stock prices.
'We have now drastically simplified it, primarily to two rates in long-term capital gains: 20% and the applicable rates. Similarly, in short-term capital gains.' 'For listed shares, there is a slight increase, but for unlisted shares, where indexation benefits are removed, there is a reduction in rates, benefiting unlisted companies, venture capital firms, etc.' 'Similarly, in real estate, wherever returns are higher, the new structure is beneficial. In very few cases, returns are lower, and those are more of an exception.'
'If a taxpayer opts for the new tax regime once, he can only switch back to the old tax regime once in his lifetime.'
Besides wrong selection of ITR form, many professionals claim deductions they are ineligible for.
rediffGURU T S Khurana answers readers' personal income tax queries.
From the financial year 2025-2026, the government has introduced a new column in the tax return form for presumptive taxpayers, requiring them to disclose their year-end investments. This requirement was not present last year.
A key mistake would be continuing to rely on provisions of the Income-Tax Act, 1961, where the new law now applies, and vice versa.
More than 8 crore income tax returns for assessment year 2024-25 have been filed this year, of which 74 per cent taxpayers have opted for new tax regime, a source said. Also, around 75 lakh updated ITRs have been filed this year in high garnered additional taxes of Rs 8,000 crore.
'PPF carries minimal risk.' 'Its fixed-income nature allows investors to diversify their portfolios.'
'Nearly 10 million people will benefit from the increase in the rebate limit for those earning up to Rs 12 lakh.' 'We expect all that money will come back into the economy in either savings, consumption, or investments.'
'The adjustments (of tax slabs and standard deduction) will reduce the tax burden for salaried individuals with an income of around Rs 20 lakh by approximately Rs 18,000.' 'For non-salaried individuals with the same income level, the savings will be around Rs 10,000.'
In sops for the middle class, Finance Minister Nirmala Sitharaman on Tuesday hiked standard deduction by 50 per cent to Rs 75,000 and tweaked tax slabs under the new income tax regime to provide more money in the hands of salaried class with a view to boost consumption. She said salaried employees in the new tax regime could save up to Rs 17,500 in income tax annually following the changes announced in the Budget. The standard deduction for salaried employees is proposed to be increased from Rs 50,000 to Rs 75,000 annually.
Several changes were made to the new income-tax regime in Budget 2023. The old income-tax regime was not tinkered with and is still available.
Businesses may eventually have to file returns largely based on invoices uploaded by suppliers, with limited scope for manual changes.
rediffGURU Vipul Bhavsar answers readers' personal income tax queries
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions
The new income tax regime for filing returns has been "sweetened" in the Budget 2023-24 and it will be beneficial for maximum number of taxpayers as they can enjoy a "reduced" tax rate, CBDT chairman Nitin Gupta said. Speaking to PTI during a post-Budget interview, Gupta said the intent of the government while announcing the new slabs and rates under the new tax regime is to gradually "do away with deductions and exemptions" so that the "long-standing demand of reduction of taxes for individual taxpayers and entities can be met." Finance Minister Nirmala Sitharaman, while presenting the Budget 2023-24 in the Parliament on Wednesday, said the government has made the new income tax regime more attractive for taxpayers and has thus brought about 'substantial changes' in its structure for the benefit of the middle class.
The most common mistake is investing without assessing suitability and long-term implications.
Despite a sharp increase in import duties on gold and silver to 15 per cent, the precious metals are trading at significant discounts in the domestic market, with gold seeing discounts of up to $200 an ounce and silver up to $6 an ounce.
Most taxpayers will benefit from being in the old tax regime, assuming they optimise their salary for tax benefits and claim the deductions available to them.
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