Income tax regime

Applicable from FY 2023-24;  AY 2024-25 

Following list of deductions and exemptions under the new tax regime which taxpayers can claim to reduce their tax liabilities:

• According to Section 10(15)(i), taxpayers receiving interest on their Post Savings Account can claim exemptions up to ₹ 3,500 and ₹ 7,000 in the case of individual and joint accounts, respectively. 
• Non-government employees receiving gratuity from their employer can claim exemption up to ₹ 20 lakh on that gratuity amount. In the case of government employees, the entire gratuity received by them is exempted from being taxed.
• According to Section 10(10D), funds received from Life Insurance Company after maturity of the account are eligible for tax exemption. 
• Employers' contributions to their employee's NPS and EPF and superannuation accounts are applicable for tax exemption. However, the contributions made in a financial year to all the employee accounts should not be above ₹ 7.5 lakh to qualify for the tax exemption.
• Taxpayers receiving interest from their Employees' Provident Fund account can claim tax exemptions on that interest, given the latter is not above 9.5%.
• Interest or the maturity amount received from the PPF account is eligible for tax exemption.
• Interests and maturity amounts received from the Sukanya Samriddhi Account are exempted from being taxed.
• The lump-sum maturity amount received from the NPS account is eligible for tax exemption. Moreover, partial fund withdrawal from the Tier I NPS account is exempted from taxation. 
• Gifts received from employers, which should not exceed ₹ 5,000, are eligible for tax exemption. 
• Employers providing allowances to employees for performing official duties are exempt from being taxed.
• If non-government employees receive a commuted pension, then 1/3rd of it qualifies for tax exemption if the employee receives gratuity. If employees do not receive gratuity, then ½ of commuted pensions will be exempted from tax. 
• The leave encashment during retirement is eligible for tax exemption.
• Monetary benefits received from employers for the cause of voluntary retirement are eligible for tax exemption. The maximum exemption limit is up to ₹ 5 lakh. 
• Education scholarships, retrenchment compensation, and monetary benefits for retirement cum death qualify for tax exemption.
• Travel allowances provided to disabled employees, conveyance allowance, allowances provided to cover the travel cost or transfer of an employee, perquisites, and daily allowances are eligible for tax exemption under this new tax regime. 
• Deduction on the interest component of a home loan borrowed for a rented property qualifies for a tax deduction.
• Standard deduction on Income from House Property. (30%)

Here is the list of exemptions and deductions that taxpayers cannot claim under the new tax regime:

• House rent allowance, based on the rent payments and salary structure
• The professional tax of ₹ 2,500
• Leave travel allowance
• Deductions on interest received from Savings Account under Section 80TTB and 80TTA
• Deductions on professional tax and entertainment allowance (applicable for government employees)
• Deduction of ₹ 15,000 from family pension as specified under Section 57 clause (ii) (a)
• Maximum deduction of ₹ 2,00,000 on interest payable towards a housing loan for vacant or self-occupied property
• Special allowances under Section 10(14), except for the one mentioned above
• Business professionals and owners in the Special Economic Zone cannot claim tax exemption under Section 10AA.
• Tax deduction under Section 35(1)(ii), 35(2AA), 32AD, 33AB, 35(1)(iii), 33ABA, 35(1)(ii), 35CCC(a), and 35AD of the IT Act
• Additional depreciation as specified under Section 32(ii) (a) 
• The option to adjust the unabsorbed depreciation of previous years
• Deductions as specified under Chapter VI-A such as 80IA, 80CCC, 80C, 80CCD, 80D, 80CCG, 80DDB, 80EE, 80E, 80EEA, 80DD, 80EEB, 80GG, 80IB, 80IAC, 80G, and 80IAB
• Minor child, helper allowances and allowances for children's education.