Nearly 73 percent of taxpayers have already opted for the new tax regime while CBDT chairman recently stated that he hopes that 90 percent taxpayers would go for the new tax regime from the next year.
However, in the new tax regime, taxpayers can claim deductions only under a few situations which we have listed here.
Taxpayers can claim exemption under these scenarios:
1) Section 80 CCD (2): This exemption is given for the contributions made by the employer towards the National Pension System (NPS).
2) Section 80CCH: This exemption is given for the income earned via Agnipath scheme.
3) Section 80JJAA: This section enables eligible businesses to claim a 30 per cent deduction on additional employee recruitment costs for three consecutive assessment years.
In case, the taxpayer wants to opt out of the new tax regime and file income tax under the old tax regime.
Rebate under 87A
The new tax regime allows taxpayers rebate under 87A which is ₹25,000 (for FY 2023-24). In Budget 2025, this rebate has been raised to ₹60,00 (to be applicable from 2025-26).
Allowances allowed both the regimes
These are the allowances given under both the regimes:
1. Any allowance granted for meeting the cost of travel on tour or transfer.
2. Any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty.
3. Any allowance granted for meeting the expenditure incurred on conveyance in the performance of duties of an office or employment of profit if the free conveyance is not provided by the employer.
4. Transport allowance is granted to an employee, who is blind or deaf and dumb or orthopedically handicapped with a disability of lower extremities, to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.
