If you invest this month, you will get income tax exemption, know which option is beneficial for you

You will have to decide this month whether you will choose the old option or the new tax regime, so that you can invest accordingly.

You will have to decide this month whether you will choose the old option or the new tax regime, so that you can invest accordingly.

There is a chance to invest till March 31 to take advantage of the exemptions given in the Income Tax Act. But before that it is important that we understand the new tax regime implemented for the first time. This will help us to save tax.

New Delhi. The last month of the financial year 2020-21 i.e. March has started. This month is an investment opportunity to take advantage of the exemptions given in the Income Tax Act. For this, it will be necessary to understand the new tax regime implemented for the first time.
You have to decide this month whether you will choose the old option or the new tax regime. If you have less amount to invest, then it will be beneficial to choose a new option. This will reduce tax rates on you. Whereas if you have enough money to invest, then you can try to trust the old option again. On News18, Chartered Accountant Harigopal Patidar gave the example of the advantages and disadvantages of both options.

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If there is no investment, it will be beneficial in the new optionThe income from your salary is seven and a half lakh rupees and there is no tax-exempt investment. Then if you try the old option then you will get a discount of standard deduction of 50 thousand rupees. With this, professional tax will be reduced by Rs 2500, HRA 47500 rupees and PF 100000 rupees. That is, your taxable income will now be 640000 rupees. On this, you will have to pay a total tax of Rs 42120. Whereas if you take a new tax regime on this salary, then you will get tax of Rs 39000 for Rs 750000. That means a savings of Rs 3120.

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Harigopal Patidar, Chartered Accountant

This will be an advantage in the old option when you invest
Income from your salary is nine and a half million rupees and you have enough investment. If you try the old option then you will get a standard deduction discount of 50 thousand rupees. Along with this, there will be a rebate of professional tax of Rs 2500 and travel allowance of Rs 15000. Also, if you include a rebate of home loan interest 82500, PF 20000, school fee and insurance 70000, home people principal amount 10000, health insurance 10000 rupees, then your taxable income will be 690000 rupees. A tax of Rs 52520 will have to be paid on this. Whereas if you do not have the above investments and adopt the new tax option, then the total tax will be Rs 70900. That is, you will save Rs 17680 by investing.
Also read: Freight rates may increase, will affect everything from fruits and vegetables, know what is the reason

You can invest here this month to save tax
If you do not have any investment and you also want to save tax, then by March 31 there is a chance to invest. You can save tax in this one month by making necessary investments in options like life insurance, PPF, tax saving FD and ELSS.



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