Union Budget 2020-21 offers taxpayers a choice to either pay tax under the new regime by foregoing the tax exemptions/deductions they have been enjoying OR continue to pay tax under the existing income tax rates by claiming the exemptions and deductions (for example, 80C, 80D, HRA, LTA, and so on) that are applicable.
Note, however, that the choice of which regime to choose will vary basis the income slabs.
However, it’s also important to know that basic calculations show that if you are a salaried individual who claims a large number of exemptions and deductions (for example, 80C, 80D, interest on housing loan, HRA, LTA, special allowance, and so on), you are likely to be better off in the existing income tax regime.
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