Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
LIVE TV DownloadNews18 App
News18 English
donald trump india visit
donald trump india visit
News18 » Business
2-min read

New Income Tax Regime Introduced in Budget 2020 Will Take Away These Exemptions

The new income tax system introduced in Budget 2020 is optional and payers will have to let go of 70 tax exemptions to avail it.

News18.com

Updated:February 1, 2020, 5:17 PM IST
facebookTwitter Pocket whatsapp
New Income Tax Regime Introduced in Budget 2020 Will Take Away These Exemptions
Representative image .

New Delhi: Finance Minister Nirmala Sitharaman during her Budget speech proposed a new tax regime for the salaried class by slashing income tax rates and rejigging tax slabs. The new system, however, is optional and payers will have to let go of 70 tax exemptions to avail it.

The new tax system has introduced four new tax slabs for income between Rs 5 lakh and Rs 15 lakh, with rates varying between 5 and 25%. You can check the new income tax rates and calculator here.

Here’s a list of major exemptions that tax payers will have to forgo if they opt for the new regime.

- Leave travel allowance exemption which is currently available to salaried employees twice in a block of four years.

- House rent allowance normally paid to salaried individuals as part of salary. This could be claimed as tax exempt up to certain specified limits if the individual was staying in rented accommodation.

- Standard deduction of Rs 50,000 currently available to salaried tax payers

- Deduction for entertainment allowance and employment/professional tax as contained in section 16

- Tax benefit on interest paid on housing loan taken for a self-occupied or vacant house property: Interest paid on housing loan for such a property could be claimed as a deduction from income from house property which resulted in a loss from house property (as the property was self/occupied or vacant). This loss could be set off against salary income thereby reducing the individuals’ taxable income and net tax liability. This comes under section 24.

- Deduction of Rs 15000 allowed from family pension under clause (iia) of section 57.

- The most commonly claimed deductions under section 80C will also go. This includes the commonly availed section 80C deductions claimed for provident fund contributions, life insurance premium, school tuition fee for children and various specified investments such as ELSS, NPS, PPF etc.

However, deduction under sub-section (2) of section 80CCD (employer contribution on account of employee in notified pension scheme—mostly NPS) and section 80JJAA (for new employment) can still be claimed.

Finance Minister Nirmala Sitharaman in a media briefing immediately after the Budget speech said that employer contribution to EPFO will be retained as exemption in the new regime.

- The deduction claimed for medical insurance premium under section 80D will also not be claimable.

- Tax benefits for disability under sections 80DD and 80DDB will not be claimable.

- Tax break on interest paid on education loan will not be claimable-section 80E.

- Tax break on donations to charitable institutions available under section 80G will not be available.

- All deductions under chapter VIA (like section 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc) will not be claimable by those opting for the new tax regime.

Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, Telegram, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.

Read full article
Next Story
Next Story

facebookTwitter Pocket whatsapp
Most Active
Company Price Change %Gain
Reliance 1,485.50 -1.24
IRCTC 1,927.75 5.30
Indiabulls Hsg 338.30 10.81
Tata Chemicals 764.50 -0.08
HDFC Life 573.75 -0.93
Top Gainers
Company Price Change %Gain
IndusInd Bank 1,181.75 3.57
Tata Steel 443.70 2.48
SBI 327.65 2.31
ONGC 102.85 1.13
Power Grid Corp 189.35 1.01
Top Losers
Company Price Change %Gain
Asian Paints 1,842.85 -2.30
HUL 2,247.85 -1.99
TCS 2,156.30 -1.75
Nestle 16,544.10 -1.38
Tech Mahindra 829.55 -1.36

Live TV

Countdown To Elections Results
To Assembly Elections 2018 Results