Finance Minister Nirmala Sitharaman has announced the abolition of several concessions and exemptions in the new income tax regime in the budget presented on Saturday, but the Modi government says that even in the new income tax regime, pension, NPS withdrawals, up to Rs 5 lakh in VRS Tax exemption on amount will be available. The finance minister announced a sweeping change in the personal income tax structure in the 2020-21 budget presented in Parliament on Saturday. The new income tax regime proposes a lower tax rate for taxpayers with an annual income ranging from Rs 5 lakh to Rs 15 lakh.
At the same time, the Finance Minister has abolished a variety of tax concessions and exemptions. Around 120 exemptions and concessions were granted in the old system of income tax, of which 70 have been withdrawn.
The exemptions you get under the new income tax regime are as follows:
- Income from the district of Nagaland, Manipur, Tripura, Arunachal Pradesh, Mizoram or North Chachar Hills, Mikir Hills, Khasi Hills, Jaintia Hills, and Garo Hills or Ladakh as dividend or interest of securities.
- Income from the government or as dividends to the residents of Sikkim or from the interest of securities.
- Cash for holidays left at the time of retirement (no limit for government employees, up to Rs 3 lakh for others).
- Pension under Shaurya Samman.
- Gratuity on death and retirement (no limit for government employees, up to Rs 20 lakh for others).
- Income from agriculture.
- Money from family property to a member of an undivided Hindu family.
- Part of the profit that the company's partner receives.
- Interest paid to overseas Indians on certain securities, debentures, and money held in the resident (external) account.
- Income to foreign diplomats, parties, and trainees.
- Amount received from the Government of India to an Indian citizen instead of service abroad.
- Compensation paid to victims of Bhopal gas tragedy.
- Assistance from government in case of any calamity.
- Up to Rs 5 lakh received under VRS.
- Amount received from a life insurance policy, including bonus (with certain conditions).
- Amount from insurance on death (without conditions).
- Interest from GPF or PPF.
- Amount from Sukanya Samriddhi Account.
- Amount of Scholarship.
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