The current income-tax regime and the new one will exist simultaneously, with the option of choosing between the two. You, the taxpayer, will now have to decide which one works for you.  Ironically, the ‘simpler’ tax regime comes with embedded complications, triggering confusion rather than a sense of relief. Here is a five-point guide to making the right choice.

Plan ahead to take an informed call

There is no single answer to the ‘switch or stick’ question. And, it doesn’t just depend on your income or salary structure. You also need to look at your investment habits, your age, life-stage, goals, responsibilities and likely expenses. You will have to plot your actual income and deduction figures to decide whether to switch or not.

For example, if you are a young individual and dislike paperwork, and claim little or no tax-saver benefits, the new regime might sound inviting. Forgoing these tax benefits to ensure more money in your hands will not be a difficult choice to make.

However, for those who do take multiple tax breaks, the older regime will help save more on taxes.

Therefore, financial planning is now more critical than ever. Start planning right away to be prepared to take a call before your employers ask you to submit your proposed investment declarations, from the April of every year. Your employer deducts your tax from your salary through the year on the basis of the indicative declarations you make. Even those who have documentation-phobia will have to put themselves through this process at least once. “Salaried tax-payers have the option of switching between the regimes, something that those who draw business income do not have. So, if you are a salaried individual, you can always change your course next year,” says Ameya Kunte, Founder, Globeview Advisors, a tax consulting firm.

Old is gold for most

Financial advisors are unanimous in their opinion: the older regime is better for most if you have been availing of multiple tax benefits, mainly those that give you an impetus to invest, such as section 80C and 80CCD tax benefits. “In most cases, the old regime will turn out to be beneficial. Only those who did not make an effort to invest in section 80C’s avenues and avail of other deductions or could not utilise this Rs 1.5-lakh limit due to higher expenses could find their tax outgo going down in the new regime,” says Pankaj Mathpal, a Mumbai-based financial planner.

For example, if your total income is Rs 7.25 lakh or Rs 10 lakh and you take 80C benefits and standard deduction, your tax outgo will be lower by Rs 18,720 and Rs 3,120 respectively in the old regime vis-à-vis the new one. Those earning say Rs 15 lakh could save Rs 14,820 in the new regime.

However, most individuals also utilise other benefits apart from the section 80C. For instance, house rent allowance (section 10), home loan interest paid of up to Rs 2 lakh (section 24B), health insurance premium paid of up to Rs 25,000 for those under 60 (section 80D), NPS contribution of up to Rs 50,000 [section 80CC D(1B)] help a great deal in bringing down the taxable income. So, if you earn Rs 15 lakh and also pay a home loan interest of Rs 2 lakh, besides claiming standard deduction and section 80C tax deduction benefits, you will be poorer by Rs 47,850 in the new regime. Put simply, the higher the number of deductions and exemptions, the better it is for you to stick to the old regime.

The post Which tax regime? appeared first on newsmantra.in l Latest news on Politics, World, Bollywood, Sports, Delhi, Jammu & Kashmir, Trending news | News Mantra.

The Key Highlights of Union Budget 2020-21 are as follows:

Three prominent themes of the Budget

• Aspirational India – better standards of living with access to health, education and better jobs for all sections of the society
• Economic Development for all – “Sabka Saath , Sabka Vikas , Sabka Vishwas”.
• Caring Society – both humane and compassionate; Antyodaya as an article of faith.
• Three broad themes are held together by:
  • Corruption free, policy-driven Good Governance.
  • Clean and sound financial sector.
• Ease of Living underlined by the three themes of Union Budget 2020-21.

Three components of Aspirational India

• Agriculture, Irrigation, and Rural Development
• Wellness, Water, and Sanitation
• Education and Skills

Sixteen Action Points for Agriculture, Irrigation and Rural Development

• Rs. 2.83 lakh crore to be allocated for the following 16 Action Points:
  • Rs. 1.60 lakh crore for Agriculture, Irrigation & allied activities.
  • Rs. 1.23 lakh crore for Rural development & Panchayati Raj.                          –
• Agriculture credit:
  • Rs. 15 lakh crore target set for the year 2020-21.
  • PM-KISAN beneficiaries to be covered under the KCC scheme.
  • NABARD Re-finance Scheme to be further expanded.
• Comprehensive measures for 100 water-stressed districts proposed.
• Blue Economy:
  • Rs. 1 lakh crore fisheries’ exports to be achieved by 2024-25.
  • 200 lakh tonnes fish production targeted by 2022-23.
  • 3477 Sagar Mitras and 500 Fish Farmer Producer Organisations to involve youth in fisheries extension.
  • Growing of algae, sea-weed and cage culture to be promoted.
  • Framework for development, management and conservation of marine fishery resources.
• Kisan Rail to be setup by Indian Railways through PPP:
  • To build a seamless national cold supply chain for perishables (milk, meat, fish, etc.
  • Express and Freight trains to have refrigerated coaches.
• Krishi Udaan to be launched by the Ministry of Civil Aviation:
  • Both international and national routes to be covered.
  • North-East and tribal districts to realize Improved value of agri-products.
• One-Product One-District for better marketing and export in the Horticulture sector.
• Balanced use of all kinds of fertilizers – traditional organic and innovative fertilizers.
• Measures for organic, natural, and integrated farming:
  • Jaivik Kheti Portal – online national organic products market to be strengthened.
  • Zero-Budget Natural Farming (mentioned in July 2019 Budget) to be included.

o Integrated Farming Systems in rain-fed areas to be expanded.

o Multi-tier cropping, bee-keeping, solar pumps, solar energy production in non-cropping season to be added.

• PM-KUSUM to be expanded:
  • 20 lakh farmers to be provided for setting up stand-alone solar pumps.
  • Another 15 lakh farmers to be helped to solarise their grid-connected pump sets.
  • Scheme to enable farmers to set up solar power generation capacity on their fallow/barren lands and to sell it to the grid.
• Village Storage Scheme:
  • To be run by the SHGs to provide farmers a good holding capacity and reduce their logistics cost.
  • Women, SHGs to regain their position as Dhaanya Lakshmi.
• NABARD to map and geo-tag agri-warehouses, cold storages, reefer van facilities, etc.
• Warehousing in line with Warehouse Development and Regulatory Authority (WDRA) norms:
  • Viability Gap Funding for setting up such efficient warehouses at the block/taluk level.
  • Food Corporation of India (FCI) and Central Warehousing Corporation (CWC) to undertake such warehouse building.
• Financing on Negotiable Warehousing Receipts (e-NWR) to be integrated with e-NAM.
• State governments who undertake implementation of model laws (issued by the Central government) to be encouraged.
• Livestock:
  • Doubling of milk processing capacity to 108 million MT from 53.5 million MT by 2025.
  • Artificial insemination to be increased to 70% from the present 30%.
  • MNREGS to be dovetailed to develop fodder farms.
  • Foot and Mouth Disease, Brucellosis in cattle and Peste Des Petits ruminants (PPR) in sheep and goat to be eliminated by 2025.
• Deen Dayal Antyodaya Yojana – 0.5 crore households mobilized with 58 lakh SHGs for poverty alleviation.

The post KEY HIGHLIGHTS OF UNION BUDGET 2020-21 appeared first on newsmantra.in l Latest news on Politics, World, Bollywood, Sports, Delhi, Jammu & Kashmir, Trending news | News Mantra.