Currently, 6.3 crore out of 8.75 crore particular person taxpayers have adopted the brand new regime, with projections suggesting an extra one crore taxpayers will swap subsequent yr due to decrease tax charges.
However, it is necessary to notice that while the Union Budget 2025 proposals have altered public notion of the brand new income tax regime, claims in regards to the old regime’s demise are untimely.
Also Read | New Income Tax Bill cleared by Cabinet: What is the New Income Tax Bill & why is it being launched? Explained
Although the brand new tax regime seems advantageous, the old tax regime nonetheless presents substantial tax discount alternatives by strategically structured salary packages with tax-efficient perks, says Sudhir Kaushik, CEO and founding father of Taxspanner. Beyond home lease allowance, quite a few choices exist to minimise tax obligations by acceptable cost-to-company restructuring.
In a column in ET, Sudhir Kaushik lists 8 salary perks that taxpayers can avail to scale back their tax outgo under the old income tax regime:
These eight salary perks provide potential tax financial savings exceeding Rs.1.35 lakh!
*In 30% tax bracket **Paid yearly
LTA or Leave Travel Allowance
Family vacation journey value reimbursement stays tax-free when claimed twice inside 4 years. LTA have to be included in CTC on the yr’s begin, with out later modifications or tax return claims.
Meal Coupons
Meal vouchers provide tax exemption up to Rs 50 per meal, roughly Rs 2,200 month-to-month. Digital wallets have simplified this long-standing profit’s utilization and compliance.
Also Read | Income Tax Slabs FY 2025-26 defined: 20 FAQs particular person taxpayers ought to examine to perceive tax charges, income tax profit under new tax regime
Newspapers & Telecom
Work-from-home web and phone bills elevated throughout the pandemic. These reimbursements, alongside newspaper and periodical prices, stay tax-free with correct documentation.
Fuel & Travel Expense
For official taxi journey, the whole quantity is reimbursable with out tax implications. When utilizing private or firm autos for work functions, one can declare gasoline and upkeep expense reimbursements. For autos used each professionally and personally, the taxable worth stands at Rs 2,700 for engines under 1.6 litre and Rs 3,300 for bigger ones.
Moveable Assets
Significant financial savings come up when organisations buy moveable belongings for employees. Under Section 17(2), company-purchased devices and home equipment for worker private use face solely 10% taxation. Computer utilization incurs no tax.
Also Read | New vs old income tax regime after Budget 2025: Post income tax slab adjustments, which tax regime is best for salaried center class taxpayers?
Driver’s Salary
For senior executives, driver employment choices exist. The driver’s wages carry a modest taxable worth of Rs 900 month-to-month, providing substantial tax benefits.
Learning and Fitness
Organisations usually cowl gymnasium memberships and ability enhancement programs. These advantages stay tax-free with correct utilization documentation.
