Can you claim any Exemption and Deduction under New Tax Regime…?

New Delhi-New Tax Regime is applicable to every taxpayer as the default regime. If tax payer wants to choose the old tax regime, they have to inform the employer or Income Tax Department before filing ITR. If tax payer chooses new tax regime, he/she is not eligible for any deduction and exemption except few that is mentioned further.In Budget 2020, a new tax regime with lower income tax slabs and concessional tax rates was implemented.These reduced rates, however, came with a condition: under the new tax system, a number of exemptions and deductions would no longer be available.In case you are unaware, taxpayers are still eligible for a few exemptions under the new tax law. The following are the exemptions we have listed:Deductions available under new tax regime:

1. Standard deduction: ₹75,000 is allowed as salary deduction under the new tax regime.
2. New Pension Scheme/NPS: Taxpayer can also claim deduction under section 80CCCD(2) for employer’s contribution to employee NPS accounts.
3. Transport allowance in case of a specially-abled person is allowed.
4. Conveyance allowance received to meet the conveyance expenditure incurred as part of the employment.
5. Daily allowance received to meet the ordinary regular charges or expenditure you incur on account of absence from regular place of duty.
6. Perquisites is allowed for official purposes.
7. Exemption on voluntary retirement under 10(10C), gratuity under section 10(10) and leave encashment under section 10(10AA).

Deductions not allowed under new tax regime:

1. Leave Travel allowance (LTA)
2. Section 80TTA/ Section TTB deduction.
3. Employment/ professional tax under 16(iii)
4. House Rent Allowance (HRA) under section 10(13A).
5. Exemptions for free food and beverages through vouchers/ food coupons under section 17(2) (viii).
6. Deductions up to ₹1.5 lakh under chapter VIA towards investments like under section 80C, 80CCC, 80DD, etc.
7. Deductions under section 80CCD (1B) of up to ₹50,000

Medical insurance premium under section 80D.Interest on home loan for self-occupied/ vacant property. It is noteworthy that salaried taxpayers are meant to inform their employer about their intended tax regime during the year. If they fail to do so, they will remain in the default tax regime, and it will be presumed that they have not exercised their option to opt out.(M.k.sinha,C.A.)