Is new earnings tax slab useful for residence mortgage EMI paying people?
The Union Budget for 2023–24 was balanced throughout all sectors, however from the attitude of taxation, it incentivized particular person taxpayers to decide on the brand new tax regime by providing the next tax rebate threshold than the outdated regime permitting them to say larger deductions from numerous sources of earnings.
Ankit Aggarwal, MD, Devika Group mentioned for homebuyers, the outdated tax system affords extra deductions for curiosity and principal funds on residence loans when in comparison with the brand new tax system.
New tax regime is not going to enable homebuyers to say deductions
However, in the case of taxation, modifications of the brand new tax regime is not going to enable homebuyers to say deductions that they’ll avail below the outdated tax regime, mentioned Anurag Goel, Director, Goel Ganga Group
The Income Tax Act of 1961 offers numerous provisions for a tax rebate on residence loans, corresponding to tax deductions on principal reimbursement of residence loans of as much as Rs.1.5 lakh below Section 80C, tax deductions on curiosity funds for a house mortgage of as much as Rs.2 lakh below Section 24, and deductions below Section 80EEA in case of inexpensive housing in case you are a first-time property purchaser, and Section 80EEA additionally permits taxpayers to say a further deduction of as much as Rs.1.5 lakh yearly.
New tax regime vs outdated tax regime: What ought to homebuyers go for?
Suren Goyal, Partner, RPS Group mentioned that every one of those deductions fall below the outdated tax regime, thus the brand new tax regime is not going to benefit residence consumers by way of reducing the tax burden on their residence mortgage.
According to Siddharth Maurya, Resource Specialist, Fund Management, those that select the brand new tax regime should forfeit the potential for deductions below Sections 80C, 24(b), and 80EEA in consideration for a decrease tax charge and a streamlined tax construction, corresponding to new tax slabs of 5, tax exemption limits of ₹3 lakh, and tax rebate limits of ₹7 lakh.
FM Sitharaman offered important reduction to all taxpayers within the new regime, however residence mortgage debtors ought to be conscious that if they’re within the larger tax bracket, they’ll successfully save tax by choosing the outdated tax regime.
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