ITR JUL-24 - KNOW YOUR BENEFICIAL REGIME

Indian Military Veterans

ITR JUL-24 - KNOW YOUR BENEFICIAL REGIME

 FILING ITR- NEW TAX REGIME FINANCILA YEAR 2023-24 (AY - 2024-25)

**HOW IT IMPACTS OUR TAX SAVING INVESTMENTS**

Revised slabs for Income Tax were announced to make the scheme more popular.  The high lights of the same are given in the succeeding paragraphs specially for the curent Fin Yr as mentioned above. 

The new regime has been modified to be more beneficial than the old regime for a tax payer with applicable deductions nearly upto Rs 2.5 lakhs. While filing the return on line, the New Regime  ....   CONTD 

is the default regime as such if one wishes to take Old Regime one needs to select the option of the Old Regime, if more beneficial.

In order to help our members our team has devised a simple on line calculator right here as under to instantly show the results of likely income tax based on your age, gross income and the authorised deductions under the Old regime. 

There are, however, few deductions which are also allowed under the New Regime but all these are not applicable to us. The deductions applicable for us is std deduction of Rs 50000/- for pensioners. The family pensioners are permitted deduction under Sec 57iii for family pensioners (Rs 15000 or 1/3 of the basic family pension which ever is less) as also applicable under old regime. 

CALCULATION OF INCOME TAX

There are number of on line calculators which are availbale on the web for calculations incl one embedded in this web post designed by one of our tecky manager. one can however calculate the tax on one's own using a simple calculator by following the steps as given below.

STEPS TO FOLLOW FOR MANUAL CALCULATIONS:-

STEP-ONE - Note down your total gross income that includes your pension, rent income and income fronm other sources. 

STEP-TWO  - Note down your appliable deductions both under the Old Regime (Applicable as hither to fore) as well as the New Tax regime (Std Deduction for salaried/Pensioners and for family pensioners 1/3rd of basic pension or Rs 15000/- which ever is less).                   

STEP- THEREE - Now calculate your Taxable Income by deducting the above deductions from the gross income. Note the same under both the regimes separately.   

 NOTE- If your Total Taxable income is less than Rs 5 Lakh inder old regime or less than Rs 7 Lakh under New regime the tax payable will be ZERO due to rebate under Sec 87A

STEP -FOUR - Calculate and note down your pur applicable basic Income Tax under new regime based on the Taxable Income for the new regime as mentioned above using the slabs as under :-

NOTE - If the taxable income was less then Rs 7,77,779/-apply marginal tax rebate as explained below to get the actal tax liability.

STEP- FIVE -  Similarly calculate and note down your payable basic income tax under the old regime based on the taxable income as calculated above using the tax slabs (There is no change to the slabs of previous years under old regime) as given below :-

 

 STEP- SIX -   Compare your tax liability under bothe the regimes and take the one which is more beneficial. 

Note -  under most cases if your deductions are less the Rs 250000/- under the old regime the Bew Regime is likely to be more beneficial.

            The Income Tax dept site has a tax calculator available which can also be used to confirm your manual calculations.

SIMPLE CALCULATOR FOR TAX IN BOTH REGINES 

FOR FIN YR 2023-24 CORRESPONDING TO AY 2024-25

The Income Tax Department have made many changes in the NEW REGIME which clearly bring out that the savings made in Tax saving Instruments will not be any more beneficialunder the New Regime . We here in this post are placing a very simple calculator which calculates the Tax under based on the Gross Income , allowed deductions and Taxable income. It compares and suggests the Regime to be taken.

 ALL CHANGES IN THE SLABS AND RATE OF TAX  FOR NEW REGIME AND DEDUCTIONS HAVE BEEN TAKEN INTO ACCOUNT. FILL UP ALL DETAILS OF THE GROSS INCOME AND DEDUCTIONS IN THE UPPER PORTION OF THE ON LINE CALCULATOR WINDOW AB-INITIO

Please go down to the calculator window and change the default values already there in various boxes to your own values . Once done click any where you get the result for bothe regimes as applicable for the current year. 

The default result of beneficial REGIME at the bottom right is for Senior Citizen Pensioners.  Please note that under the new new scheme there are no specified categories of the tax payers as in the old regime.

*************** ACTIVE ON LINE WINDOW *****************

Please wait for this Window to Open fully

**************ON LINE***************

As a thumb rule if your deductions under various sections of Income Tax Act is 2.5 Lakh or less the new regime is likely to be more beneficial to the tax payer.

 however check from the above to confirm before making a choice.

ON LINE CALCULATOR  - 2 

The calculator embedded here on this web page is simple, depending upon the resources of your laptop or other device the calculator window may take a minute to load and show up. 

Once you have worked out your Gross Income from all sources and also the authorised deductions under the Old Regime please write them down on a piece of paper. 

Here in the calculator window once it loads up fully, change the default figures of Income and deductions with your own figures and then select from the dropdown menus which show up as you take your mouse on the right hand selection to select whether you are a Salaried/pensioner or Not and that whether you are a Senior, Super-Senior Citizen or Not.   

  Watch the instant results of the Basic Taxes separately under both the Regimes and the Recommendation for Opting for the New or Old Regime as generated by AI.             

       

NOTE -- Family pensioners should deduct the amount permitted under Sec 57iii (Rs 15000 or 1/3 of Family which ever is less) from the Gross Total Income and enter the balance of the total Income in this calculator.

METHODOLOGY UTILISED - The calculator first divides the Gross Total Income into applicable slabs differently for both regimes in the background and then calculates taxes under each slab. The total taxes are then added, rebate under Sec 87A is then deducted if applicable. The resultant taxes are then displayed and the system compares these taxes and recommends the better option of Regime for you. The Cess and the Surcharge where applicable are neither calculated nor applied which may be done at your end to know the taxes payable. 

  Marginal tax Relief is not catered for in this calculator as such if your taxable income under New Regime is less than Ra7.77 Lakh please apply the rebate as explained in this post

The calculations are hidden and not displayed in the calculator window.

**THE ACCURACY OF CALCULATIONS HAS BEEN VALIDATED, HOWEVER WE ARE OPEN TO YOUR REMARKS AND SUGGESTIONS **

  Members may take their decisions on their tax saving investments for the Financial year starting on 01 Apr 2023, based on the results displayed by  the calculator. An article in Economic Times can also be refered to at the end of this page

Old Regime vis-à-vis New Regime as approved by Finance Act, 2023 from Income Tax India

Finance Minister Nirmala Sitharaman has in Budget 2023 announced slew of changes in income tax slabs under the new tax regime. The key changes announced on February 1,2023, are:

Changes in the income tax slabs under the new tax regime

Standard deduction introduced for salaried individuals, pensioners under the new tax regime

* Basic exemption limit hiked to Rs 3 lakh from Rs 2.5 lakh under the new tax regime

* Highest surcharge rate reduced to 25% from 37% under the new tax regime

* Rebate under Section 87A increased to taxable income of Rs 7 lakh under the new tax regime only* from Rs 5 lakh under the old scheme. This means that individuals having taxable incomes up to Rs 7 lakh and opting for the new tax regime will not pay any tax since the rebate of Rs 25000/- is applied under Sec 87A. In addition to this Marginal Relief is also applicable if the taxable income is slightly more than Rs 7 Lakhs. 

                     Marginal Tax .Relief - Without going into definition please folllow this example . Suppose the Taxable income works out to rs 720000/- the tax calculated as per slabs will be Rs 27000/-. For an additional income of Rs 20K you pay Rs 27K ie more than the exceded income. The marginal tax relief will be applicable in this case as such one will pay the tax = Rs(27000- Tax Calculated MINUS 20000- exceeding amount) = Rs 7000/- . Here you get a rebate of Rs 20000/- and pay only Rs 7000/- The breakeven amount is approximately Rs 7,77,779/- beyond which one pays tax as calculated.

 

*There is, however, no change to rebate under the old tax regime  upto Rs 5 Lakhs as the limit for No Income tax (REBATE UNDER SEC 87(A)).  Marginal Relief is also not applicable to the old regime.     

     For those veterans who have been migrated to SPARSH they can report these investments to PDA (PCDA(P)) and their choice of the Old or New Regime on line by logging into their SPARSH account.

Just for yiur info here are the income tax slabs for FY 2022-23 that you may need to calculate your Taxes while filing revised income tax return the financial year ended on 31 March 2023.

Income tax slabs under pre-revised  new tax regime for FY 2022-23 (LAST ASS YEAR)

OLD TAX REGIME - TAX SLABS - FYs 2022-23-24

Edn Cess is applicable at 4% on the income tax payable for FY 2022-23-24. Further, surcharge will be applicable on taxable incomes above Rs 50 lakh. A rebate under Section 87A was available in both tax regimes for taxable incomes up to Rs 5 lakh for FY 2022-23 which has been evised only for the New Tax regime for the current year to 7 Lakh.

DEDUCTIONS PERMITTED OR NOT-PERMITTED UNDER REGINMES FINANCIAL YEAR 2023-24.

Allowances which are allowed as exempted under both regimes.

1. Any allowance granted for meeting the cost of travel on tour or transfer;
2. Any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty;
3. Any allowance granted for meeting the expenditure incurred on conveyance in the performance of duties of an office or employment of profit if the free conveyance is not provided by the employer; and
4. Transport allowance granted to an employee, who is blind or deaf and dumb or orthopedically handicapped with a disability of lower extremities, to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.
5. Deductions allowed under Secs. 80CCH(2), 80CCD(2), 80JJAA, family pension deduction under section 57(iia)

Following Deductions are not allowed under the New Regime. 

1. Exemption with respect to travel concession or assistance as covered in section 10(5);
2. HRA exemption as covered in section 10(13A);
3. Any other allowance as covered in section 10(14) or section 10(17);
4. Entertainment allowance and professional tax as covered in section 16(ii) and section 16(iii) respectively

Comparitive Income tax slabs (In Rs)

For Individual/ HUF/ AOP/ BOI/ Artificial Juridical Person (AJP) 
as per section 115BAC proposed by Finance Bill, 2023

TAX CALCULATOR OF THE I-TAX DEPT:-  The Income Tax Department has brought out a detailed Tax Calculator for us to calculate of tax under Old as well as the New regime as applicable for filing the returns oby 31 Juky 2024. This is available after one logs into one's ITR filing account on https://incometax.gov.in . One must make use of the same.

Take your decision with regard to the Option to be taken by you after you have calculated your tax liability under both the regimes.

INVESTERS -  Old vs new income tax regime for investors: Know which one suits you best

https://economictimes.indiatimes.com/markets/stocks/news/old-vs-new-income-tax-regime-know-which-one-suits-you-best/articleshow/99336601.cms

FOLLOWING DOCUMENTS ARE ASO MADE AVAILABLE FOR REFERENCE  (DRIVE MGR.GRPS)

**  INCOME TAX READY RECKONER 

**  BUDGET SPEECH - FEB 2023

**   NEW INCOME TAX CALCULATOR