Finance Minister Nirmala Sitharaman’s Budget 2020 announcements for the salaried class proposes a new tax regime slashing income tax rates and rejigging income tax slabs to ostensibly prune total tax payable by individuals. But the rider: most key exemptions are gone if one were to go for this option: home loan interest, HRA, LTA, health insurance. And standard deduction.
So what are the exemptions you will have to forgo if you opt for the new tax regime announced by Nirmala Sitharaman? Here is a detailed list:
Individuals or HUFs opting for taxation under the newly inserted section 115BAC of the IT Act shall not be entitled to the following exemptions/deductions:
* Leave travel concession as contained in clause (5) of section 10;
* House rent allowance as contained in clause (13A) of section 10;
* Standard deduction, deduction for entertainment allowance and employment/professional tax as contained in section 16;
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* Interest under Section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. (Loss under the head income from house property for rented house shall not be allowed to be set off under any other head and would be allowed to be carried forward as per extant law);
* Deduction under Section 35AD or section 35CCC;
* Any deduction under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc).
However, deduction under sub-section (2) of section 80CCD (employer contribution on account of employee in notified pension scheme) and section 80JJAA (for new employment) can be claimed.
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