Income Tax News: Knowing the tax regime in the nation is the first step toward reducing taxes. There are currently two taxation schemes in effect in the nation. Now that they have more options, taxpayers can choose a tax regime that will enable them to save more money. You will automatically be moved to the new tax regime if you haven’t made any decisions. Here is How You can save Tax on salary above 1 Crore in India.
New Tax Regime
If you are a salaried person earning more than Rs 1 crore, you should be aware of the following points under the new tax regime:
The following are the surcharge rates if income surpasses Rs. 50 lakhs.
- If Taxable Income is grater than 50,00,000 then surcharge will be 10%
- If Taxable Income is grater than 1,00,00,000 then surcharge will be 15%
- If Taxable Income is grater than 2,00,00,000 then surcharge will be 25%
In addition to a surcharge, a 4% health and education cess is applied to gross tax liabilities. The Finance Act of 2023 set a maximum surcharge ceiling of 25% under the New Tax Regime.
Available Deductions and Tax Exemptions Under the New Tax Regime
- Transportation reimbursements if an individual has a specific need
- Conveyance allowance obtained to cover the cost of transportation incurred while working
- Anything paid to cover the expense of a tour or transfer while travel
- Aaily stipend obtained to cover the usual costs or expenses you spend due to his absence from his regular place of employment
- Requirements for formal reasons
- Exemptions from 10(10C) for voluntary retirement, 10(10) for gratuities, and 10(10AA) for leave encashment
- Section 24 Interest on Home Loan for the Rented Property
- Present up to Rs. 50,000
- Section 80CCD(2) specifies the deduction for the employer’s NPS account contribution
- Deduction for supplemental labor expenses (Section 80JJAA)
- Under the New Tax Regime, a standard deduction of Rs 50,000 will be available starting in FY 2023–2024
- Amount paid or deposited in the Agniveer Corpus Fund under Section 80CCH(2)
- Deduction of family pension income under Section 57(iia)
Old Tax Regime
If you are a salaried person earning more than Rs 1 crore, you should be aware of the following points under the old tax regime:
The following are the surcharge rates if income surpasses Rs. 50 lakhs
- If Taxable Income is grater than 50,00,000 then surcharge will be 10%
- If Taxable Income is grater than 1,00,00,000 then surcharge will be 15%
- If Taxable Income is grater than 2,00,00,000 then surcharge will be 25%
- If Taxable Income is grater than 5,00,00,000 then surcharge will be 37%
A further 4% of the Health and Education Cess will be applied to your gross tax due after you have calculated your gross payable tax liability, plus a surcharge. Individuals under 60 years old are eligible for the slab rates mentioned above. The basic exemption ceiling for those over 80 will be Rs. 5,00,000, while for those between the ages of 60 and 80, it would be Rs. 3,00,000.
Available Deductions and Tax Exemptions Under the Old Tax Regime
Section 80C Deductions
Up to ₹1.5 lakh can be deducted from investments made in schemes such as PPF, EPF, NSC, ELSS, and life insurance premiums.
Health Insurance Premiums
Section 80D allows for the deduction of premiums paid for parents, children, spouses, and self-only health insurance coverage.
Home Loan Interest
Under Section 24(b), interest paid on house loans is deductible for self-occupied residences up to ₹2 lakh.
Education Loan Interest
Under Section 80E, interest paid on loans for higher education, whether taken out in India or elsewhere, is deductible.
Donations to Charitable Institutions
Under Section 80G, contributions made to authorized charity organizations are deductible.
