Big news for investors. Many working individuals choose to invest in various schemes to reduce their tax burden. Some opt for small savings plans like the Public Provident Fund (PPF), while others prefer tax-saving mutual funds, including those offered by LIC. Let’s explore what the recent general budget has in store for these investors.
Finance Minister Nirmala Sitharaman revealed that there will be a full tax exemption on annual incomes up to Rs 12 lakh, applicable under the new income tax framework. Additionally, with a standard deduction of Rs 75,000, salaried individuals will not owe any taxes on annual earnings up to Rs 12.75 lakh.
The Finance Minister also introduced modifications to the tax slabs in the new tax system. Now, there will be no tax for annual incomes of Rs 4 lakh. A 5% tax will apply to incomes between Rs 4 lakh and Rs 8 lakh, 10% for Rs 8 lakh to Rs 12 lakh, 15% for Rs 12 lakh to Rs 16 lakh, 20% for Rs 16 lakh to Rs 20 lakh, 25% for Rs 20 lakh to Rs 24 lakh, and a 30% tax will be imposed on annual incomes exceeding Rs 24 lakh.
Investors who utilize small savings schemes or LIC plans for tax savings fall under the old tax regime. This year’s budget did not include any updates regarding the old tax system, indicating that those investing for tax benefits will need to continue with the previous system for the foreseeable future.
If you are a frequent investor, both tax regimes can be advantageous. However, if your primary goal is to save on taxes, it may be more beneficial for you to transition to the new tax regime.
Desclaimer: For any financial invest anywhere on your own responsibility, Times Bull will not be responsible for it.
