Taxability of employee benefits may decide which tax regime makes more sense for you

25 May 2023 Business Insideradmin

When deciding between the old and the new tax regimes, most of us will consider the most common deductions like those under section 80C, 80D, or also the deduction available on principal and interest on home loans, before taking a call. However, one must not forget that employee benefits are also treated differently under the old and new tax regimes, and this will also need to be considered before making your choice.

“For FY24, the tax slab rates have been reduced to make the new regime more attractive. Standard deduction of ₹50,000 from salary income has been made available, the basic exemption has been increased to ₹3 lakh and surcharge rate has been reduced to 25% for high net worth individuals (HNI's) having annual income exceeding ₹5 crore. With a clear intention of implementing a simplified tax model, the government has taken considerable efforts to make the new regime of taxation lucrative and appealing,” says Sneha Pai, senior director at Nexdigm, a professional services group.

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