ITR Filing: There will be huge tax savings under this regime, know these 6 ways..

New Tax Regime: The new financial year started on April 1 and with this, people across the country have started preparing to file their Income Tax (Old Tax Regime) Return (ITR) as soon as possible. This return will be filed for the financial year 2024-25, which covers the period from April last year to March this year.

During this time, people are analyzing their income and investments (New Tax Regime) to determine whether the old tax regime or the new tax regime will be better for them. If you too are not able to choose the right regime for yourself from these two, then this news can be very beneficial for you, we will tell you which tax regime will benefit you more -

Old Vs New Tax Regime -

If you have made many tax-saving investments, then the old tax regime may still be better for you. But if you do not have many tax-saving investments, then the new tax regime can prove to be beneficial as the tax slab rate is lower in it (New Tax Regime Vs Old Tax Regime).

Finance Minister Nirmala Sitharaman had announced some new deductions under the new tax regime in the 2025 budget. But still, the old tax regime is better for those who invest. So let's know how you can save income tax in 6 ways under the new regime -

1. Standard Deduction -

In the new tax system, the standard deduction has been increased to Rs 75,000, which was earlier Rs 50,000. This change has come into effect from the financial year 2025-26. The standard deduction in the old tax regime is still Rs 50,000.

This means (ITR Filing) that in the new tax regime, you can save additional tax of up to Rs 25,000. This change is a significant benefit for taxpayers, especially those with low income. This will reduce their tax liability and they will have more money to spend.

2. Employer's investment in NPS Section 80CCD(2)

This exemption is only for the salaried class, freelancers, or those running their businesses who cannot avail of this benefit. If you invest in a National Pension System (NPS) account, you are entitled to an additional exemption.

For government employees (Income Tax) it is up to 14 percent of basic salary and dearness allowance (DA). For private sector employees, it was earlier up to 10%. This exemption is available only to those who work regularly for a company or organization and receive a salary.

3. Contribution to Agniveer Corpus Fund - Section 80CCH(2)

Under the Agneepath scheme, Agniveers get retirement after four years of service. Both the government and Agniveer contribute to this scheme. Apart from this (How To Save Tax), if the Agniveer dies during service, then tax exemption is also given on the amount received by his family. This exemption is available in both the old and new tax systems.

4. Exemption on Family Pension -

In the Indian tax system, tax exemption is given on the pension received by the family of the employee after his death. This exemption is a relief for those families who have to face a sudden loss of income. Under the new tax system, one-third of the pension, or Rs 25,000 is tax-free. This provision is especially helpful for those families who have no other source of income.

5. Transport and Conveyance Allowance -

This decision of the government helps disabled employees to face the challenges in their daily lives. This exemption of Rs 3,200 every month for commuting from home to the office can be a small relief for them. This exemption is decided based on their actual expenses, which ensures that they are getting help as per their actual need.

6. Some exemptions under section 10 -

Initially, no exemption was being given under section 10 in the new tax regime. However, now some important exemptions have been included which provide relief to those taking VRS. Now tax exemption is being given on an amount up to Rs 5 lakh so that a part of the amount they get after their retirement will be tax-free.

In addition, gratuity is completely tax-free for government employees, while for private employees it depends on the situation. Additionally, the amount received instead of leave at the time of retirement or resignation, called leave encashment, is now tax-free up to Rs 25 lakh.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.