New tax deduction: The new tax system is being adopted rapidly and the government wants most taxpayers to adopt it. So far, about 73% of taxpayers have chosen it, and the government hopes that by next year the figure will reach 90%. Although many traditional discounts and cuts are not available in the new system, relief is still available in select cases.
The government has made some new changes in the budget 2025, including tax exemption and some special discounts. Know here what are the cases where you can get tax exemption.
In which cases will be tax exemption available?
- Employer’s contribution to NPS – If the employer contributes to the National Pension System (NPS), it will be tax -free under Section 80 CCD (2).
- Income from Agneepath scheme – The income earned under the Agneepath scheme has been exempted from tax under 80 CCH.
- Cut on recruitment of new employees – If business recruit new employees, it will get 30% additional tax exemption for three years under 80Jjaa.
Change in tax exemption
The tax exemption under Section 87A under Budget 2025 has been increased. It was ₹ 25,000 by FY 2023-24 but it has been increased from the financial year 2025-26 to ₹ 60,000.
Allowance available in both tax systems
Some allowances will be available in both tax systems, whether they are new or old:
- Travel expenditure during transfer or seizure
- Reimbursement of daily expenditure on traveling for work
- Traffic expenditure if the employer does not provide transport facility
- Transport allowance for blind, hearing impaired
Option to choose old tax system
If a taxpayer wants, he can adopt the old system except the new tax system. But, earlier it is important to compare both options and see which system will be more beneficial for you.
