In the previous post, we discussed how the new tax regime will be the efficient tax regime for most people.
You can refer the previous week’s post at https://ciis.in/old-vs-new-tax-regime-what-should-you-choose/

We will NOT go into the maze of IT provisions and hidden deductions available in the old tax regime.

In this post we will focus on 𝗼𝗽𝘁𝗶𝗼𝗻𝘀 𝗮𝘃𝗮𝗶𝗹𝗮𝗯𝗹𝗲 𝗳𝗼𝗿 𝘁𝗮𝘅 𝘀𝗮𝘃𝗶𝗻𝗴 𝗶𝗻 𝗡𝗲𝘄 𝘁𝗮𝘅 𝗿𝗲𝗴𝗶𝗺𝗲:

𝟭̲)̲ ̲𝗗̲𝗲̲𝗱̲𝘂̲𝗰̲𝘁̲𝗶̲𝗼̲𝗻̲ ̲𝗳̲𝗼̲𝗿̲ ̲𝗲̲𝗺̲𝗽̲𝗹̲𝗼̲𝘆̲𝗲̲𝗿̲’̲𝘀̲ ̲𝗰̲𝗼̲𝗻̲𝘁̲𝗿̲𝗶̲𝗯̲𝘂̲𝘁̲𝗶̲𝗼̲𝗻̲ ̲𝘁̲𝗼̲ ̲𝗡̲𝗣̲𝗦̲ ̲𝗮̲𝗰̲𝗰̲𝗼̲𝘂̲𝗻̲𝘁̲ ̲[̲𝗦̲𝗲̲𝗰̲𝘁̲𝗶̲𝗼̲𝗻̲ ̲𝟴̲𝟬̲𝗖̲𝗖̲𝗗̲(̲𝟮̲)̲]̲:̲

• 14% of salary (Basic + DA).

• Also note that the employer’s contribution to NPS, along with contributions to Provident Fund (PF) and superannuation funds, is tax-exempt up to a combined limit of ₹7.5 lakh per year. Any excess beyond this maximum becomes taxable in your hands.

• 𝗔𝘀𝗸 𝘆𝗼𝘂𝗿 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗿 𝘁𝗼 𝘁𝗿𝗮𝗻𝘀𝗳𝗲𝗿 𝘆𝗼𝘂𝗿 𝗮𝗰𝗰𝗼𝘂𝗻𝘁 𝗳𝗿𝗼𝗺 𝗶𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹 𝗡𝗣𝗦 𝗮𝗰𝗰𝗼𝘂𝗻𝘁 𝘁𝗼 𝗰𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗡𝗣𝗦 𝗮𝗰𝗰𝗼𝘂𝗻𝘁 𝘁𝗼 𝗮𝘃𝗮𝗶𝗹 𝘁𝗵𝗶𝘀 𝗯𝗲𝗻𝗲𝗳𝗶𝘁.

• Salary structure will be readjusted, and your in-hand salary will be reduced accordingly.

𝟮̲)̲ ̲𝗜̲𝗻̲𝘁̲𝗲̲𝗿̲𝗲̲𝘀̲𝘁̲ ̲𝗼̲𝗻̲ ̲𝗛̲𝗼̲𝗺̲𝗲̲ ̲𝗟̲𝗼̲𝗮̲𝗻̲ ̲𝗼̲𝗻̲ ̲𝗹̲𝗲̲𝘁̲-̲𝗼̲𝘂̲𝘁̲ ̲𝗽̲𝗿̲𝗼̲𝗽̲𝗲̲𝗿̲𝘁̲𝘆̲ ̲(̲𝗦̲𝗲̲𝗰̲𝘁̲𝗶̲𝗼̲𝗻̲ ̲𝟮̲𝟰̲)̲:̲

• Deduction is allowed with no ceiling limit for interest on loans borrowed for let-out property.

• Unlike self-occupied properties (upper limit: 2 lacs), there is no upper limit for claiming this deduction.

• 𝗜𝗳 𝘆𝗼𝘂 𝗮𝗿𝗲 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝘁𝗼 𝗯𝘂𝘆 𝗮 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗳𝗼𝗿 𝗴𝗲𝗻𝗲𝗿𝗮𝘁𝗶𝗻𝗴 𝗮 𝗿𝗲𝗻𝘁𝗮𝗹 𝗶𝗻𝗰𝗼𝗺𝗲, 𝘁𝗵𝗲𝗻 𝗰𝗼𝗻𝘀𝗶𝗱𝗲𝗿 𝘁𝗮𝗸𝗶𝗻𝗴 𝗮 𝗛𝗼𝗺𝗲 𝗹𝗼𝗮𝗻 𝗮𝗻𝗱 𝗰𝗹𝗮𝗶𝗺𝗶𝗻𝗴 𝘁𝗵𝗶𝘀 𝗱𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻.

𝟯̲)̲ ̲𝗥̲𝗲̲𝗶̲𝗺̲𝗯̲𝘂̲𝗿̲𝘀̲𝗲̲𝗺̲𝗲̲𝗻̲𝘁̲𝘀̲ ̲𝗳̲𝗿̲𝗼̲𝗺̲ ̲𝗲̲𝗺̲𝗽̲𝗹̲𝗼̲𝘆̲𝗲̲𝗿̲:̲

• Many companies offer various reimbursements as part of an employee’s Cost to Company (CTC), which can include expenses for fuel, travel, driver’s salary, home office setup, internet, books, and periodicals.

• These reimbursements are tax-free under both the old and new tax regimes, provided the employee submits the required bills and proofs.
These are the 3 most relevant deductions still available to salaried employees in the new income tax regime.

Next week we dive into the taxation aspects of EPF contributions.