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general budget Under the new tax regime, an annual income of 7 lakhs has been made tax-free. However, along with this the old tax system has also been maintained. Due to this, those who want to save income tax by investing, they can continue with it. In the old tax system, a person gets tax exemption on investments and expenses under various heads like Income Tax Section 80C, 80D, 80CCD(1b), HRA, LTA. Let us tell you that income tax exemption can be obtained on investments made till March 31, 2023. In such a situation, if you are employed and till now you have not invested to save tax, then do not delay now. We are telling you how much exemption you can get under which stream of income. Also, by investing where you can get excellent returns along with tax exemption.
Tax Exemption under Section 80C: If you opt for the old tax regime, you can claim a maximum deduction of Rs 1.5 lakh under Section 80C of Income Tax. Under Section 80C deduction, an individual can save tax of Rs 46,800 (including cess). You can invest in investment vehicles like Employees Provident Fund (EPF), Public Provident Fund (PPF), 5 year FD, ELSS Mutual Fund etc. to get tax exemption under Section 80C. Apart from this, you can also get exemption under section 80C on paying school fees of children, life insurance premium, principal amount of home loan.
Tax exemption under section 80CCD(1b): This section of income tax gives you the benefit of an additional deduction of Rs 50,000 on the investment made in the National Pension System (NPS) in a financial year. This deduction is in addition to the section 80C deduction. Therefore, an individual can avail deduction under section 80C and section 80CCD(1b) up to a maximum of Rs 2 lakh.
Tax under section 80CCD(2) Exemption: This deduction can be claimed by an employee if an employer contributes to the NPS account. The maximum deduction that an employee can claim is 10% of the salary. In case of a Government employee, a maximum deduction of 14% of the salary is allowed.
Tax Exemption under Section 80D: The benefit under this section is available on the premium paid for the health insurance policy. Under this section, if an individual is below 60 years of age, then a maximum deduction of Rs 25,000 is allowed. However, if the person is a senior citizen, a maximum deduction of Rs 50,000 can be claimed. Also, additional deduction can be claimed if health insurance premium is paid for the parents. Therefore, a person paying health insurance premium for self (as well as spouse and dependent children) and parents can claim a maximum deduction between Rs 50,000 and Rs 1 lakh.
Tax-exemption on HRA: If you are receiving House Rent Allowance (HRA) as part of your salary and living in a rented house, you are eligible to claim tax exemption on HRA.
Deduction on home loan interest: If you have taken a home loan, a taxpayer can claim deduction on interest paid on housing loan under section 24, apart from claiming deduction on repayment of home loan principal. Under this section, you can avail a maximum deduction of Rs 2 lakh.
Standard deduction of 50 thousand in the old tax regime
Standard Deduction: A salaried individual is eligible for standard deduction of Rs 50,000 from salary income. No documents are required to claim this deduction. It is a deduction given directly to a salaried employee from his salary income.
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