New tax regime: Deductions and exemptions explained

livemint.com:

Subscribe to enjoy similar stories. While the new tax regime trims down the deductions and exemptions available to taxpayers, it still offers several strategic benefits that can lighten the load for individual taxpayers. Here’s a breakdown of what you can still claim under the revamped system.

For salaried individuals who opt for the new tax regime, there’s a standard deduction of ₹75,000. Additionally, the employer’s contribution to the National Pension Scheme (up to 14% of salary) is eligible for deduction. Read this | Goodbye old tax regime; new regime now more attractive Housing loan interest can be set off against rental income.

However, if the interest exceeds the rental income, the resulting loss cannot be offset against other income heads, nor can it be carried forward. That said, if there is another rental property, the loss can be adjusted against the rental income from that property. Municipal taxes paid on a property are also deductible.

Interest on a housing loan for a self-occupied property, however, is not available for deduction under the new tax regime. In the old regime, such interest could be claimed, and any resulting loss could be set off against salary or other income, with the ability to carry it forward. Unlike the old tax regime, where deductions could be claimed on up to two self-occupied properties, the new regime doesn’t have this provision. However, the 30% standard deduction on rental income remains applicable.