As the deadline for providing income tax declarations for the next financial year i.e. 2020-21, all employees will have to decide if:
– they want to select the new tax regime which has lower tax rates or;
– continue with old tax regime which has higher tax rates but where various deductions such as life insurance payment, ELSS, investment in fixed deposits under 80C and medical expenditure, health insurance under 80 D can be claimed.
Your employer will deduct TDS every month according to the choice you make. Generally for persons in higher income levels, above 15 lacs it would be a better choice to continue to claim exemptions under the old tax regime.
If you need help in deciding which regime you should choose, you can use this simplified calculator which will tell you the tax liability under both regimes
If you need further help, you can write to us at email@example.com and we will help you plan for free.
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