Beginning this evaluation yr, taxpayers can have the choice to decide on between outdated and new tax regime for the aim of submitting their earnings tax return (ITR). The new tax construction, launched in Budget 2020, does away with 70 odd tax deductions and exemptions and lowers tax charges for annual incomes as much as ₹12.5 lakh.
Despite the main deductions on investments beneath Section 80C, House Rent Allowance (HRA), customary deduction of ₹50,000 and medical insurance coverage premium, amongst others gone, not all is misplaced for taxpayers who’re mulling choosing the brand new tax regime.
One such vital deduction obtainable is on curiosity paid on a house mortgage taken for a rented-out property. “The rule foregoes tax profit on a house mortgage on a self-occupied property. The tax guidelines nonetheless enable deduction on curiosity paid in the direction of mortgage on a rented property beneath part 24(b),” mentioned Karan Batra, founder, charteredclub.com.
Another vital tax profit allowed beneath the brand new tax construction is deduction on employer’s contribution in National Pension Scheme (NPS) beneath part 80CCD (1B).
Similarly, maturity proceeds and gathered curiosity from PPF and Sukanya Samriddhi Yojana (SSY) will proceed to be tax exempt. The new tax regime has solely foregone deduction profit on contributions made on these two funding choices.
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