The following calculations are common for both the old and new regime:
- Rebate under section 87A: Taxpayers with an annual income of up to Rs 5 lakh will continue to get the tax rebate of Rs 12,500 on the calculated tax.
- Health, Education Cess, and Surcharge Rates remain the same.
One can still claim deduction under sub-section ( 2) of section 80CCD which is basically an employer’s contribution towards employee’s account in NPS and section 80JJAA ( for new employment). Also note that if the employee’s contribution to EPF and NPS exceeds more than Rs 7.5 Lakh, in the financial year in question, then the employee is liable to pay tax. Here’s a list of important exemptions that are retained in the new system
Important exemptions which are retained in the new system:
- Income from Life Insurance,
- Agricultural Income,
- Standard reduction on rent,
- Retrenchment compensation,
- Leave encashment on retirement,
- VRS proceeds up to Rs 5 lakhs,
- Death cum retirement benefit,
- Money received as a scholarship for education, etc.