More Than 40 deductions or exemptions available under New Tax Regime For FY 24-25: Check Before Filing



Quick Summary
The New Tax Regime for FY 24-25 offers a substantial list of over 40 deductions and exemptions, contrary to the belief that it's a tax-free regime. These include standard deductions for salaried individuals, rebates, and specific exemptions for family pensions, rent income, and home loan interest. Various other exemptions cover investments like PPF and LIC, gifts from relatives, inheritance, and specific allowances for travel and conveyance.

The New Tax Regime for the financial year 2024-25 offers more than 40 deductions and exemptions. Let's check what those are-

New Tax Regime FY 24-25: 40  Deductions and Exemptions
  1. Standard Deduction - Rs 75,000 for Salaried or Pensioner.
  2. Basic Exemption Limit - Up to 3 Lakh No Tax
  3. Rebate 87A - T.I. Rs 7 Lakh - Tax Rebate Rs 25,000
  4. Family Pension - Maximum Rs 25000 for the Pensioner.
  5. 30% Ad Hoc Standard deduction on Rent Income (Let-out).
  6. No limit for interest paid on Home Loan up to Rent Income (Let-out) (cannot be carried forward).
  7. Employer Contribution 80CCD(2) - Limit 14% of Salary (Basis + DA).
  8. Travelling Allowance - Cost of Travel on Tour or Transfer is exempted.
  9. Daily Allowance - Daily Charges Incurred for Tour.
  10. Conveyance Allowance - Actual Expenditure for office purposes.
  11. Transport Allowance - Only for a disabled Person up to Rs 3,200 Per Month.
  12. Gratuity - Exempt Rs 20 Lakh for other than government and for Government 100% Exempted.
  13. Leave Encashment - Exempt Rs 25 Lakh (Govt - 100% Exempt).
  14. Voluntary Retirement - Exempt upto Rs 5 Lakh (once in a lifetime).
  15. PPF Interest and Maturity is exempted.
  16. LIC Maturity is exempt but the premium must not be more than 10% of the sum.
  17. Sukanya Samridhi Yojana Interest & Maturity is Exempt.
  18. Agriculture Income is Exempt.
  19. Interest from Tax-Free Bonds - Fully Exempt.
  20. Gift from Relatives - Spouse, Mother, Father etc. are Fully Exempt (no limit in bank transfer but below 2 Lakh limit in cash received).
  21. Gift from All Non-Relatives - up to Rs 50,000 No Tax.
  22. Gift from Non-Relatives - On Marriage Occasion - Fully Tax Free (no limit in bank transfer but below 2 Lakh limit in cash received).
  23. Gift Received from Local Authority, Registered Trust/Institution.
  24. Gift made in Contemplation of the Donor's Death are fully Exempt.
  25. Property received under a will or inheritance is exempted.
  26. 80CCH Contribution to Agniveer Corpus Fund - fully Exempt.
  27. 80JJAA Additional Employee Cost - Deductible.
  28. LTCG u/s 112A Equity Shares or Mutual Funds - Exempt Up to Rs 1,25,000
  29. Marginal Relief available.
  30. Capital Gain Exempt u/s 54, 54B, 54D, 54EC, 54F, 54G, 54GA
  31. Indexation Benefit in Case Sale of Property, i.e., Long Term Capital Gain.
  32. Post Office Saving Interest 10(15)(i) - Exempt up to Rs 3,500
  33. Non-Taxable Perks - Official Purpose - Laptop, Medical Facility, Interest-Free Salary Loan.
  34. Depreciation Allowed u/s 32.
  35. Presumptive Taxation Benefits u/s 44AD/44ADA/44AE.
  36. Disaster Compensation - Exempt u/s 10(10BC) - Central Government/State Government/Local Authority.
  37. Provident Fund Received - Statutory u/s 10(11) / Recognized u/s 10(12) - Exempt.
  38. Approved Superannuation Fund - Exempt u/s 10(13).
  39. Scholarships granted to meet the cost of education - Exempt u/s 10(16).
  40. Award Instituted by Government - Exempt u/s 10(17A).
  41. Pension Received by Winner of "Param Vir Chakra", "Maha Vir Chakra", "Vir Chakra" or such other gallantry award - Exempt u/s 10(18).
 
  1. Defence Medical Disability Pension - Exempt u/s 10(18).
  2. Armed Forces Family Pension in case of Death during Operational Duty - Exempt u/s 10(19).
  3. Commuted/Lumpsum Pension - Fully Exempt Govt. Employees: 1/3 or 1/2 Exempt Non-Govt. Employee.
 

Overall, the New Regime is not entirely "no-exemption" based, but taxpayers can strategically use these 45 deductions or exemptions for significant tax savings, while also enjoying simpler slab rates.


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I write about Income Tax, GST, TDS, RBI updates, government schemes, and personal finance in India. My focus is on simplifying complex tax and compliance topics into easy-to-understand guides that help readers stay updated with the latest financial rules, investment options, and regulatory changes.

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