Income Tax Return: During the budget this year, Finance Minister Nirmala Sitharaman had announced to make annual income of Rs 12 lakh tax free under the New Tax Regime. Today we are telling you how you can make annual income of Rs 19.20 lakh tax-free by choosing the New Tax Regime.
Every year taxpayers choose one of the two tax regimes, the first Old Tax Regime and the second New Tax Regime, to file Income Tax Return i.e. ITR. The central government wants more and more taxpayers to choose the New Tax Regime, so under the New Tax Regime, annual income of Rs 12 lakh has been made tax free. Apart from this, the benefit of standard deduction of Rs 75 thousand will also be available in the New Tax Regime.
In this way, those whose salary or income is Rs 12.75 lakh annually will not have to pay any income tax. Earlier, in the new tax regime, there was no income tax on income up to Rs 7 lakh. The new tax regime has come into effect from April 1, 2025. This was announced by Finance Minister Nirmala Sitharaman in the budget. Today we are telling you how by choosing the new tax regime, you can make an annual income of Rs 19.20 lakh tax-free, that is, you will not have to pay a single rupee as tax.
Investment will have to be made in NPS
If your annual income is Rs 19.20 lakh, then for tax exemption, you just have to invest in the National Pension Scheme (NPS). By doing this, your taxable income will be reduced and you will not have to pay a single penny in tax. Before knowing how investing money in NPS will give tax exemption, let us know what will be the salary structure of an annual income of Rs 19.20 lakh?
Salary structure
If you earn Rs 19.20 lakh annually, that is, your total CTC is Rs 19,20,000, then you will not get the full amount in hand. Out of the total CTC, the basic pay will be Rs 6 lakh. After this, the personal allowance will be 5 lakh 50 thousand. The minimum PF contribution will be Rs 21,600. Gratuity will be Rs 28,800. Variable pay will be Rs 96,000 and flexi pay tax-free component will be Rs 6,23,600. In this way, the total CTC will be Rs 19,20,000.
Tax deduction of Rs 75 thousand is available
Under the new tax regime, a tax deduction of Rs 75 thousand is available from the government. According to this, your total CTC of Rs 19.20 lakh will become Rs 18,45,000 after deducting Rs 75,000. If you choose the option of National Pension System i.e. NPS, then according to government rules, under the new tax system, you will get a discount of 14 percent on your basic salary. 14 percent of basic salary 6 lakh will be Rs 84 thousand. In this way, after NPS, after deducting Rs 84,000 from Rs 18,45,000, an income of Rs 17,61,000 will be left.
…then you will not have to pay a single penny tax
If the salary is high, then the benefit of flexi pay tax free components is available. According to this salary, the conveyance will be Rs 2,85,600. Rs 1,08,000 will be deducted for books and magazines, Rs 2,40,000 for entertainment and Rs 90,000 annually for uniform. The total amount will be Rs 6,23,600. If we subtract this amount from Rs 17,61,000, the taxable income will be Rs 11,37,400. The government has made income up to Rs 12 lakh tax free in the new tax regime, so according to this, a person with a CTC of Rs 19.20 lakh will not have to pay a single penny of tax.
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