Finance Minister Nirmala Sitharaman on Saturday presented a new income slab structure for taxpayers. Sitharaman, however, has left it to the taxpayers whether to opt for a new scheme or to continue with the old system. Know here that there are many tax exemptions that taxpayers will not be able to take if they opt for the new system. (#BudgetOnZee)
Taxpayers opting for the new scheme will not be entitled for deduction under 80C of the Income Tax Act. Section 80C provides a deduction for a contribution towards insurance premium, deferred annuity, provident fund and a certain type of shares.
Under the new tax regime, the taxpayers will also have to forego deduction under 80CCC (contribution towards certain pension fund), Section 80D (health insurance), 80E (interest on loan for higher education), 80EE (interest on loan taken for residential property), 80EEB (purchase of electric vehicle), 80G (donation to charitable institutions), and 80G (rent paid).
The new scheme also takes away the tax benefits entitled to the taxpayers for leave travel concession (LTC), allowances for the income of minors, school fees and certain allowances of MPs/MLAs.
The income tax benefit will not be available in respect of free food and beverages through vouchers provided to employees either.
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However, certain deductions are proposed to be retained in the new regime, like conveyance allowance for meeting expenses in the performance of duty and allowance for travel on tour and transfers.