The new tax regime has expanded the number of tax slabs and reduced rates for those earning below Rs. 15 lakhs. However, the new regime does not allow any major deductions or exemptions. Hence, the choice between the two tax regimes depends on individual circumstances. However, if lower rates are more important than other benefits, taxpayers can choose the new regime. There is a catch though. Some deductions may not be available in the new regime.
The new tax regime has reduced tax rates on income slabs, but sacrifices tax deductions offered by the previous regime. Since there are two tax regimes, taxpayers are torn between the former and the latter. It is important to weigh the benefits and drawbacks of both. There is no single tax regime that is more beneficial. However, a combination of tax deductions and exemptions may make a tax payer’s life easier.
The new tax regime allows individuals to invest in various financial instruments without worrying about deductions. Individuals who earn more than Rs. 12 lakhs can benefit more from the former than the latter. As a result, it is important to figure out your tax liability and consider tax-saving investments before making a decision. These are only a few benefits of the new tax regime. A comparison of the two tax regimes will help you determine which one is right for you.
The new tax regime has also eliminated 70 sops. This includes the House Rent Allowance and Housing Loan Interest Payment. Nevertheless, many of the new tax regimes are favorable to individuals and HUFs. The frequency with which you switch to the new tax regime will depend on your income source and the types of tax liabilities that you are eligible to file for. However, if you are already paying taxes on these expenses, you can benefit from the HRA and HUF deductions.
While the advantages of a new exchange rate regime outweigh these drawbacks, there are some downsides. Rigid exchange rate regimes anchor inflation expectations, support output growth, and increase a country’s vulnerability to crises. They also hinder external adjustment. The recent experience of emerging market countries in Europe highlights this trade-off. While pegged exchange rate regimes helped some countries develop, they also facilitated the building of large external imbalances and restricted countercyclical macroeconomic policies.
While some people may view regime change as an opportunity with low risks and high rewards, it can undermine the effectiveness of other tools of foreign policy aimed at promoting freedom and human rights. And by overusing regime change as a tool, the United States is limiting its ability to pursue its policy goals. There are better ways to achieve these objectives without a high cost. In addition, regime change is likely to end up in a costly extended military operation.
In addition to the lower tax rates, the new tax regimes allow salaried taxpayers to opt in or out of the new regime each year. However, individuals with business income can only opt in or out of a new tax regime once – for all future years. In the meantime, salaried taxpayers can continue to take advantage of the lower rates by investing in tax-deductible assets during the year. If the new tax regime becomes unfavorable, the employee can opt for the old tax regime and enjoy the lower taxes that the former regimes offered.