WHICH TAX REGIME SHOULD YOU SELECT?

Tax planning

The New Regime has Lower Slab Rates and Fewer Exemptions than the Old Regime, which has Deductions and Exemptions. Employees must notify their employers of their preferred tax structure at the beginning of the new financial year.

WHY DO YOU HAVE TO OPT FOR A TAX REGIME? 

Because the CBDT (Circular no 04/2023) made it COMPULSORY for the Employers. Hence, employers are asking their employees for information about which income tax regime they wish to select. Accordingly, the employer will be deducting TDS. You must choose between the New and Old Tax Regimes; otherwise, the Employer will automatically deduct TDS in accordance with the New Tax Regime. The goal of TDS on Salary has no bearing on whether the taxpayer files an income tax return under the Old or New Income Tax Regime. It is modifiable during ITR filing.

TIPS ON WHICH IS THE RIGHT TAX REGIME FOR YOU 

For Income up to Rs 7 lakh the New Tax Regime is better 

In case you don’t have Tax savings and Deductions to avail then consider the New Tax Regime 

In case you have just Rs 1.5 lakh of 80C Deduction then the New Tax Regime might be better 

Old Tax Regime would be better if you have Rs 1.5 lakh of 80C Deduction and a Home Loan. 

In case you have an HRA Deduction to claim, the Old Tax Regime might be better for you. 

OPTING FOR OLD OR NEW TAX REGIME, WHICH IS WISER?

You can get tax deductions and exemptions under the old income tax regime. Comparatively speaking, the new tax system will make determining taxable income simpler. Additionally, the new tax system may assist you in reducing your taxes if you are unable to invest during the financial year.

Location: India

Comments

Post a Comment

Popular posts from this blog

Equity and Debt funds

Image
  What are Debt Funds? Debt funds  are the pool of investments that are invested in highly rated fixed-income earning securities like central and state government bonds, treasury bills, and other money market instruments . It is to be noted that debt funds are investing into fixed income earning instruments and hence the risk is quite less. Debt funds are good for shorter investment horizons like 3 to 5 years. When the units purchased in a debt fund are sold within three years, then the income will be taxed considering short-term capital gains. Any sale of units of a debt fund held for more than 3 years is treated as long-term capital gains for tax purposes. Debt funds are managed by an experienced team of fund managers, hence the investment in debt funds is considered safe. Debt funds are highly liquid and one can get money back within a day’s time. There can be an incidence of exit load for the withdrawal of the amount within a stipulated time frame. What are Equity
Read more

GOLD AS AN INVESTMENT

Image
It is well known that Indians are obsessed with Gold. The amount of Gold in Indian households is unparalleled. Indian obsession with gold has only grown stronger over time. India accounts for the majority of world gold consumption. Despite the fact that a large number of Indians live on a meager income, they find methods to purchase gold and make it a vital part of their life, regardless of the rate of gold. Instead of viewing gold as an investment tool that we received from our parents or grandparents, Indians have a distinctive perspective on the precious metal. But over time, our perception of gold has evolved. Today, gold is viewed as an investment as well. It would be advantageous to diversify the portfolio using gold as an inflation hedge in a constantly shifting global economy. Certain events that reduce the value of stocks and bonds will cause the price of gold to increase. It helps to safeguard your cash from unfavorable stock market movements. You might invest for the lo
Read more

MONEY MANAGEMENT

Image
No matter how much (or little) you know about investments, stock markets, credit cards, and insurance, your financial planning is most likely to fail if you don't have a solid understanding of your money.  The first and possibly most crucial stage in financial planning is to have a solid understanding of your finances, or your financial situation, and to be able to manage them intelligently. So, what is your financial situation? 1) Earnings and Expenses: In order to assess how much money, you have in hand after taking care of your requirements and goals, what you make will be less important than how much you spend. To be in a better financial situation, one needs to set a ‘balance’ between earning and spending habits. And the same can be used as a benchmark to plan your finances. A positive or zero bank balance at the conclusion of most months corresponds to a weak financial trend, whereas a healthy bank balance at the end of the month typically indicates a tendency towards a stro
Read more