Budget Giving big relief to the middle class, the annual income of up to Rs 12 lakh has been made tax free. At the same time, standard deduction of 75 thousand rupees has been given separately to salary class. Due to this, the earnings of up to 12.75 lakhs of the employed class have become tax free. But is this the last limit? If you earn more than this, you will have to pay tax? Let us tell you that even if your annual earnings are up to Rs 13.70 lakh in a case, you will not have to pay a tax of 1 rupee. Let’s know how this will happen.
NPS benefits also given in New Tax Region
It has been clarified in the budget that under Section 80CCD (2) of Income Tax in New Tax Reseem, tax is deducted up to 14% of the basic salary of the employee invested in NPS. Under the old tax system, the profit is less than 10% of the original salary. Taking advantage of this, employees can pay zero tax on Rs 13.70 lakhs annually and can save around Rs 96,000 annually. However, this is possible only when the employer provides NPS benefits to the company as part of the cost. Employees cannot choose it themselves.
In this way, income of up to 13.70 lakh will be tax free
If a person earns ₹ 13.70 lakh annually and considers a 50% share of the basic salary of ₹ 6.85 lakh, then NPS contributed at 14% will be ₹ 95,900. In this way, with a standard deduction of ₹ 75,000, no tax will have to be paid on an annual income of a full ₹ 13.70 lakh. However, very few people are still taking advantage of NPS. The NPS profit was started about 10 years ago.
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