List of tax deductions in New tax regime (section 115BAC)

These are the tax deductions retained in the New Tax regime (section 115BAC)

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Published: February 1, 2020 at 5:19 pm

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These are the tax deductions retained in the New Tax regime (section 115BAC)

Also see: New tax regime (section 115BAC): you cannot avail these deductions!

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List of tax deductions retained in the New Tax regime (section 115BAC)

  1. Retirement benefits, gratuity etc.
  2. commutation of pension
  3. leave encashment on retirement
  4. retrenchment compensation
  5. VRS benefits
  6. EPFO: Employer contribution
  7. NPS withdrawal benefits
  8. Education scholarships
  9. Payments of awards instituted in public interest


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  1. Looks like ones without PF and other savings under 80c and having an income upto 15lac are going to benefit.
    Mostly non-salaried people.
    Now many would think if they really want to save under 80c/80d etc.
    Earlier tax savings was a bait used by insurance companies.
    Now it is interesting to see how it goes.

    Overall for salaried, this will not benefit much.

  2. this years’s budget for 2020 – 21 , very much disappointing as there is hardly any benefit / or very little benefit ,
    for the salaries employees , retired people , and senior
    citizens ; it is all the more killing as almost all exemptions are withdrawn , altogether ; like standard
    deduction , 80 C deductions , etc. etc. every successive
    F M s are equally the same ; people are helpless , and
    they can do nothing , but to cry only ;

  3. On Employer Contribution to EPFO: Just checked that under 115BAC, the section for the simplified regime, one of the exemptions allowed is 80CCD(2). However, this is only employer contribution to NPS, upto a limit of 10% of basic+dearness. So as far as I understand, employer contribution to EPF is not included any more. I think this is reflecting a gradual shut-down of EPF and a move towards NPS over time.

  4. This year Sr. Citizens with 8 lakhs income were not required to pay any tax if they did saving & other expenditure of 3 lakhs (St. deduct. Med. Exp., Fd/saving interest, Savings PPF, LIC etc) as net income upto 5 lak was not taxable. Next A Y, sr cilizen had to pay 45,000/- + cess as there is 5% tax for income from 2.5 lak to 5 lakhs. If one has invested in companies and is getting dividend, one has to pay much more. Is it correct.

  5. BJP reduced tax on corporate, but when there was turn for middle class employee, they did nothing. that is why they are called “shoot-boot vali ” Government.

  6. Many private companies give food/meal vouchers. I have searched many blogs and found that it comes under clause: Valuation of Perquisites:Rule 3 (7) (3).

    So will it be taxable if new regime is opted or continue to be tax free ?

  7. My understanding is that, if a person has home loan, only then he is benefited from old tax regime. Otherwise, new tax structure is very good.

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