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This article is more than 1 year old.

Budget 2020: Here's a list of exemptions, deductions you can avail in the new tax regime

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The new tax structure comes with a reduced number of tax exemptions and concessions for individuals.

Budget 2020: Here's a list of exemptions, deductions you can avail in the new tax regime
Budget 2020 proposed new income tax slabs with reduced rates. The new personal income tax slabs are optional and are available to those who are willing to forego some deductions. The new tax structure comes with a reduced number of tax exemptions and concessions for individuals.
According to Sandeep Sehgal, director at tax and regulatory, Ashok Maheshwary & Associates LLP, the new optional scheme of taxation for individuals will not benefit those who are eligible for certain exemptions and deductions like house rate allowance (HRA), home loan interest, 1.5 lakh deduction etc.
"These deductions often form the significant chunk which are deducted from the taxable income. The more is the eligibility, the more would be the incentive to stick with the old scheme,” he said.
Here are the important exemptions that are ceased to exist under the new tax regime:
  • Leave Travel Allowance
  • House rent Allowance
  • Allowances to MPs/MLAs
  • Standard deduction
  • Deduction for entertainment allowance and employment/professional tax
  • Deduction from family pension
  • Exemption of Rs 1,500 for income of minor child included in the income of the person
  • Loss for home loan interest for self-occupied property
  • Deduction of Rs 1.5 lakh under Section 80C
  • Health Insurance premium under Section 80D
  • Food and Beverage exemption
  • Tax break on interest paid on education loan
  • Some of the allowances as contained in clause (14) of section 10
  • Exemption for SEZ until contained in section 10AA
  • Various deduction for donation for or expenditure on scientific research
  • Following allowances will be allowed even under the new tax regime:
    • Transport Allowance to handicapped employees for commuting from home to office and back.
    • Agricultural Income.
    • Amount received by a member of the Hindu undivided family (HUF) from the of income of family estate.
    • Allowances paid for the official duties such as conveyance, tour and travel, etc.
    • Share of profit received by a partner from the firm.
    • Allowance/perquisites to the government employees paid by the Government of India to its citizens for rendering services outside India.
    • Exemption to an individual or HUF in respect of capital gain arising on transfer by way of compulsory acquisition of agricultural land situated in an urban area.
    • Family pension received by the widow or children or nominated heirs, of a member of armed forces (including paramilitary forces) if the death of such member of armed forces has occurred in the course of operational duty.
    • Interest on various securities issued/notified by the Government including the tax-free bonds issued by the public sector companies to residents.
    • Scholarship granted to meet the cost of education.
    • Amount including bonus received under a life insurance policy subject to certain condition. Amount received on death is, however, exempt without any conditions.
    • Partial withdrawal from NPS.
    • Payment received from Sukanya Samriddhi account.
    • Payment received from NPS on closure.
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