Income Tax: New or Old Regime

raksrules said:
@puns and Others

I too feel new regime is better for me. Reason being...

  • I am in 30% slab rate.
  • The only deductions I can claim are 1.5L for 80C (I don't invest in NPS) and 80D for medical insurance for my family.
  • No HRA but flat is not in my name so I could potentially claim HRA by paying rent to my dad but I don't. Not sure how much impact this will have if I started doing so.
Apart from this, I don't have any home loan so no deduction there.

I would love to hear if anyone thinks I can get somehow more benefit with old regime.
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Almost everyone , except a very few exceptions will benefit from old regime.
Even if you leave everything else, NPS (which everyone definitely should considering its a 50K basket of your choice coming to you for 33k) and HRA (which again, you should) in addition to your 80C 1.5L will put you quite a bit better off than new regime
 
superczar said:
Almost everyone , except a very few exceptions will benefit from old regime.
Even if you leave everything else, NPS (which everyone definitely should considering its a 50K basket of your choice coming to you for 33k) and HRA (which again, you should) in addition to your 80C 1.5L will put you quite a bit better off than new regime
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Exactly what I've been saying.
By saturating 80C (2lac) itself most people will be better off with old regime.

Example with 10LPA gross salary and 0 investments and reimbursements/benefits.
1650529301411.png



Same 10LPA gross with just 80C saturated.
1650529367724.png


It only gets better if you claim HRA and other things if possible.

If you have gross income of just under 7.5 Lac then by old regime and just 80C investment you can have 0 tax liability. Since 2 Lac of 80C + additional 50K standard deduction will take you just shy of 5 Lac net taxable income and then u have 0 tax liability. If you do this with new regime you'll pay full tax.

New regime is mostly for people who just don't care at all and don't even wanna give thought or invest time into savings and just go with whatever is being deducted.
 
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@enthusiast29

Can you give link of that calculator? I want to check on using the numbers as per my salary. I am confused about one thing though. The LPA (Lakh Per Annum), I should mention in the calculator should be my CTC or I should deduct some of the things?
 
raksrules said:
@puns and Others

I too feel new regime is better for me. Reason being...

  • I am in 30% slab rate.
  • The only deductions I can claim are 1.5L for 80C (I don't invest in NPS) and 80D for medical insurance for my family.
  • No HRA but flat is not in my name so I could potentially claim HRA by paying rent to my dad but I don't. Not sure how much impact this will have if I started doing so.
Apart from this, I don't have any home loan so no deduction there.

I would love to hear if anyone thinks I can get somehow more benefit with old regime.
Click to expand...

i believe you can claim HRA benefit as you described. its a matter of headers and how it figures in overall calcluation for both regimes and deciding.
 
raksrules said:
@enthusiast29

Can you give link of that calculator? I want to check on using the numbers as per my salary. I am confused about one thing though. The LPA (Lakh Per Annum), I should mention in the calculator should be my CTC or I should deduct some of the things?
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If it starts with the Gross Salary, then I would assume the calculator has deductions for various sections.

Even at 20L gross, you will only save 15.6k if you don't opt for 80C at all. 80C alone makes the old regime preferable. Since the rate is 30% at 15L for the new regime, higher salaries will attract the same incremental tax. It is only beneficial at the lower end of the spectrum.

1650538217802.png
 
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raksrules said:
@enthusiast29

Can you give link of that calculator? I want to check on using the numbers as per my salary. I am confused about one thing though. The LPA (Lakh Per Annum), I should mention in the calculator should be my CTC or I should deduct some of the things?
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That's my company's portal but you can find many calculators online and/or excel sheets to calculate it.

It's Gross salary that's the income not CTC.
 
t3chg33k said:
If it starts with the Gross Salary, then I would assume the calculator has deductions for various sections.

Even at 20L gross, you will only save 15.6k if you don't opt for 80C at all. 80C alone makes the old regime preferable. Since the rate is 30% at 15L for the new regime, higher salaries will attract the same incremental tax. It is only beneficial at the lower end of the spectrum.

View attachment 132187
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Yes this is my situation (not the salary figure). With old regime, I only have 50K standard deduction and 1.5L 80c. I even added 18K for yearly health insurance (80D?). Based on that, I found new regime better as it seems it is evident from your post. But yes, if I start adding 50K NPS then I may break even if using old regime and if any further things like HRA etc, I can possibly reduce tax liability.

Btw people telling that paying your father rent if flat is in his name, then I know my dad will have to show that as rental income but he is retired and no salary as such. All income he has is capital gains from his investments, saving account interest and so on. For making this work, do I need a proper registered agreement and some sort of police intimation for me as renter need to be done? Or there is no need of agreement at all?


On a side note, when I think about NPS, I know 40% goes into annuity and 60% is what I get on retirement. Now that 40% is then something that gives me pension every month. But what if I die immediately after I have taken the 60% on retirement, what happens to the 40%? Does my nominee get the pension?
 
raksrules said:
Yes this is my situation (not the salary figure). With old regime, I only have 50K standard deduction and 1.5L 80c. I even added 18K for yearly health insurance (80D?). Based on that, I found new regime better as it seems it is evident from your post. But yes, if I start adding 50K NPS then I may break even if using old regime and if any further things like HRA etc, I can possibly reduce tax liability.

Btw people telling that paying your father rent if flat is in his name, then I know my dad will have to show that as rental income but he is retired and no salary as such. All income he has is capital gains from his investments, saving account interest and so on. For making this work, do I need a proper registered agreement and some sort of police intimation for me as renter need to be done? Or there is no need of agreement at all?


On a side note, when I think about NPS, I know 40% goes into annuity and 60% is what I get on retirement. Now that 40% is then something that gives me pension every month. But what if I die immediately after I have taken the 60% on retirement, what happens to the 40%? Does my nominee get the pension?
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It depends on how strict your company is. Some get away with only submitting a receipt. Others insist on a stamped rental agreement. If it is the latter, then it will be difficult to claim.

It also depends on how much information your company provides to the I-T department. If total rent is less than 1L, you don't even have to submit PAN which reduces traceability to your father. If you claim too high an exemption, then it will definitely come under the I-T lens, so have to strike a balance.
 
raksrules said:
Yes this is my situation (not the salary figure). With old regime, I only have 50K standard deduction and 1.5L 80c. I even added 18K for yearly health insurance (80D?). Based on that, I found new regime better as it seems it is evident from your post. But yes, if I start adding 50K NPS then I may break even if using old regime and if any further things like HRA etc, I can possibly reduce tax liability.

Btw people telling that paying your father rent if flat is in his name, then I know my dad will have to show that as rental income but he is retired and no salary as such. All income he has is capital gains from his investments, saving account interest and so on. For making this work, do I need a proper registered agreement and some sort of police intimation for me as renter need to be done? Or there is no need of agreement at all?


On a side note, when I think about NPS, I know 40% goes into annuity and 60% is what I get on retirement. Now that 40% is then something that gives me pension every month. But what if I die immediately after I have taken the 60% on retirement, what happens to the 40%? Does my nominee get the pension?
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Claim as much HRA as possible such that your dad doesnt exceed the tax free limit. Submitting rental agreement or his PAN is trivial in face of the savings you get. Rental income can be split and declared between your parents so you can take advantage of their entire tax free limit.
My earlier landlord held a join account with his wife so that both of them could declare partial rental income to work the slabs.

I'm sticking with old regime as I claim exemptions under 80C, 80D, 24E.
 
t3chg33k said:
It depends on how strict your company is. Some get away with only submitting a receipt. Others insist on a stamped rental agreement. If it is the latter, then it will be difficult to claim.

It also depends on how much information your company provides to the I-T department. If total rent is less than 1L, you don't even have to submit PAN which reduces traceability to your father. If you claim too high an exemption, then it will definitely come under the I-T lens, so have to strike a balance.
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it would actually make sense to get a notarized agreement done anyway (cheap and easy) - its perfectly legal to rent out a house from your parent
and assuming they are retired, your rental payment would anyway be out of taxable income for the most part , esp if split between 2

(taxable part for landlord = rental income -30% for maintenance - municipal taxes)
 
Didn't want to make a new thread but my question is related to income tax since it's the season now.
So here goes... I was trying to fill ITR this year and I saw in the pre-filled form on the website an amount under bank interest which is less than 10K INR (max tax-free interest amount).

Now the thing is the website is charging me tax on that amount and not exempting it as per section 80TTA. I should not be charged any tax if income from bank interests is less than 10K.

Also my father's account has accumulated interest more than 10K and all is being taxable and no rebate of 10K is being shown.

Please advise.

EDIT: Can be claimed under deductions section 80TTA. I overlooked it.
 
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So my CA prepared and shared with me the challan on 29th last month, I went ahead and paid it at the bank on 4th July and I got the confirmation.
Now I have got a letter Intimation u/s 143(1) of a demand for a small amount for 'Interest and Fee Payable'.
My CA says this happens when challan is made in a different month and payment is done different month and they have charged me interest for this. Also he said this is unusual for individual and mostly in corporate returns.

Anyone has thoughts on this. I paid the challan well within the time period written on it of validity (maybe 14 days
 
@puns did you pay advance tax? i think if you don't then interest etc need to be paid, maybe your CA forgot to include it, but i thought the IT portal automatically populates the forms.

Anyways I'm not a CA/TRP nor do I know the details of your tax/income structure heh.
 
vishalrao said:
@puns did you pay advance tax? i think if you don't then interest etc need to be paid, maybe your CA forgot to include it, but i thought the IT portal automatically populates the forms.

Anyways I'm not a CA/TRP nor do I know the details of your tax/income structure heh.
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In the letter all amounts match... like Income, tax details, pre paid taxes. only 'Interest and Fee Payable' is slightly higher than what i paid under 234B+C.
I just want to know if my CA made a mistake or the demand is not right.

I'll take an opinion of another CA but just wanted to check here first
 
puns said:
So my CA prepared and shared with me the challan on 29th last month, I went ahead and paid it at the bank on 4th July and I got the confirmation.
Now I have got a letter Intimation u/s 143(1) of a demand for a small amount for 'Interest and Fee Payable'.
My CA says this happens when challan is made in a different month and payment is done different month and they have charged me interest for this. Also he said this is unusual for individual and mostly in corporate returns.

Anyone has thoughts on this. I paid the challan well within the time period written on it of validity (maybe 14 days
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Let me get this. You are a corporate professional right?
Then whats the challan thing? Is that something for last years IT?
 
nRiTeCh said:
Let me get this. You are a corporate professional right?
Then whats the challan thing? Is that something for last years IT?
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Yes & IT Dept Challan Reciept you get on e-filing. Sorry for wording as CA prepared challan. He did the calculation and asked me to fill the the tax amount at bank via cheque.
got the challan receipt from it dept acknowledging payment recieved
 
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