New tax regime: In the budget 2025, the government has given great relief in the new tax system. Now the limit of basic tax exemption in the new tax regime has been reduced to Rs 12 lakh. That is, you will not have to pay tax on such annual salary. For this, no deduction i.e. discount will not have to be claimed. Most of the people who get salary are directly benefited. But with this, many tax -saving tax saving options are now outdated. Is the home loan still beneficial for old tax systems restaurant?
Cutting of old tax system will no longer be found
In the new tax regimen, HRRA i.e. House Rent Allowance, LTA i.e. Leave Travel Allowance, exemption received under section 80C like PPF and ELSS etc. and health insurance under section 80D are no longer available. The biggest shock is to those taking home loans. A discount of up to Rs 2 lakh on home loan interest is available under section 24 (b) annually. Also on the payment of the Home Loan Principal, there was a discount of up to Rs 1.5 lakh in 80C.
Is the old system still better due to home loan?
It completely depends on your income and discounts. If you have more income and you are taking full advantage of discounts like HRA, PPF, NPS, then the old system can still prove to be better.
If your annual income is Rs 14 lakh, then there should be a tax exemption of at least Rs 5.74 lakh (ie 41%) so that the old system proves beneficial. If your income is Rs 20 lakh, then there should be a discount of about 7.6 lakh rupees (38%) only then the old tax system will be better.
Benefits on home loan in new tax system
The new tax system does not get interest exemption at your own living house, but if you rent a property, then the home loan interest can be exempted till the income of the fare got. Suppose if Naveen gets Rs 1 lakh from rent and he is giving Rs 5 lakh in interest, then he will get a discount of only 1 lakh rupees. They can add the remaining 4 lakhs to the purchase cost of that property in future, which will reduce capital gains tax while selling.
New tax is beneficial for who is beneficial
If your income is low and you do not take much discounts, then the new tax system is easy and beneficial. But if you take many discounts like home loan, HRA, PPF, then the old system can still save you more tax.
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