Tax Saving: With the implementation of the new tax regime, numerous rules concerning tax exemptions have undergone significant changes. Previously, under the old tax system, individuals could save on taxes through deductions such as the Public Provident Fund (PPF) and the National Savings Certificate (NSC).
In the 2024 Budget, the standard deduction limit has been raised by Rs 25,000, bringing it to Rs 75,000 in the new tax framework, compared to the old limit of Rs 50,000. Taxpayers earning up to Rs 3 lakh will now be exempt from paying any taxes, while those with a taxable income of up to Rs 7 lakh will receive a rebate of either Rs 25,000 or the total tax amount, whichever is lower.
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Life insurance
Regarding life insurance, the maturity proceeds of a policy will remain tax-free if the premium does not exceed 10% of the sum assured.
Voluntary Retirement Scheme
For pensioners, if one opts for a Voluntary Retirement Scheme (VRS), an amount of up to Rs 5 lakh will be exempt from taxation. Additionally, contributions made by employers to employees’ pension accounts (NPS) under section 80CCD (2) will not be taxed up to Rs 2 lakh.
Senior citizens
Senior citizens and super senior citizens previously enjoyed tax exemptions of up to Rs 2 lakh and Rs 5 lakh, respectively. Now, a total income of Rs 7 lakh is exempt from taxation, providing them with additional relief.
Tax saving on gratuity
Employees will also benefit from tax exemptions on gratuity amounts received from their employers, up to Rs 20 lakh.
Daily allowance
Lastly, individuals receiving a fixed daily allowance for travel or transfers can claim deductions on these amounts. Furthermore, up to Rs 1,600 can be exempted monthly for conveyance allowances, and those with disabilities can also claim transport allowances.