How is TDS calculated on a new tax regime?

What are the disadvantages of the new tax regime?

The old regime offers more exemptions and deductions, allowing for greater tax planning and savings. However, it has a complex structure and limited flexibility. The new regime provides lower tax rates and a simpler structure but has fewer exemptions and limited tax planning opportunities.

What deductions are allowed in new regime?

The new tax regime allows salaried people and senior citizens earning pensions a standard deduction of ₹75,000. Family Pension: If you have a family pension income, the new regime offers a deduction for it. You can claim a deduction of ₹25,000 or one-third of the pension amount, whichever is lower.

What are the common mistakes in TDS?

TDS Filing Software: Avoid These 7 Common Mistakes for Accuracy

• Using Outdated or Non-Compliant TDS Filing Software. ...
• Wrong PAN, TAN, or Section Mapping During Data Entry. ...
• Delayed Payment or Late Return Filing. ...
• Challan Errors or OLTAS Mismatch. ...
• Missing or Late Generation of Form 16 / 16A.

Who is eligible for 2% TDS?

Rate of TDS : TDS is to be deducted at the rate of 2 percent on payments made to the supplier of taxable goods and/or services, where the total value of such supply, under an individual contract, exceeds two lakh ifty thousand rupees.

What are the new rules for TDS payment?

The TDS exemption limit for dividend and mutual fund income will be raised to Rs. 10,000/- starting April 2025. This means TDS will only be deducted when your total earnings exceed Rs. 10,000/- per year, making tax deductions less frequent.

How to reduce tax in a new regime?

How to Save Tax in India? 10 Smart and Legal Ways for FY 2025-26

1. Use Section 80C to Save up to ₹1.5 Lakh. ...
2. Invest in National Pension System (NPS) – Section 80CCD(1B) ...
3. Claim House Rent Allowance (HRA) ...
4. Interest on Home Loan – Section 24(b) ...
5. Tax Benefits on Education Loan – Section 80E.

How much TDS is deducted on a 70,000 salary?

TDS on Salary would be deducted @ 9.56%. Therefore TDS on Salary would be 9.56% of Rs. 70,000 i.e. Rs.

How to claim TDS during ITR?

Step 4: Fill in TCS details in your ITR

1. Navigate to the "Taxes Paid and Verification" section.
2. Look for the "Details of Tax Collected at Source" subsection.
3. Enter the details from your TCS certificates or Form 26AS.
4. The system will automatically calculate your tax credit.

What is the standard deduction for TDS new regime?

As per the changes announced in the Union Budget of July 2024, salaried individuals can now claim a Standard Deduction of ₹75,000, an increase from the previous limit of ₹50,000 in 2023. Additionally, family pensioners are also eligible to claim a Standard Deduction of ₹25,000, up from ₹15,000 in the previous year.

How does TDS affect my tax return?

There's no specific form or process to claim TDS refunds. You usually just need to file your income tax return. If the TDS deducted from your salary is more than your actual tax liability, the excess amount will be due as a refund and reflected in your return.

How much TDS is deducted on 60,000 salary per month?

Here's how TDS is calculated: Annual Income = ₹50,000 x 12 = ₹6,00,000. Tax Liability (as per slabs) = ₹60,000. TDS Deducted Monthly = ₹60,000 / 12 = ₹5,000.

Is TDS deducted on basic salary or CTC?

TDS on salary is deducted at the time of actual payment of salary and not at the time of accrual. This means that tax will be deducted when the employer pays the salary, regardless of whether it is paid in advance, on time, or in arrears (i.e., delayed payment).

Is TDS 100% refundable?

Q- Is TDS 100% refundable? The amount of TDS refund you receive depends on the amount of tax liability you have. For example, if your income is not taxable, still your TDS was deducted, and you might be eligible for a 100% tax refund.

What are the TDS changes from 1st April 2025?

The TDS rate for section 194LBC - Income received from investment in securitization trusts for residents has been reduced to 10%. With effect from 1st April, 2025, a new section 194T is inserted, wherein TDS has to be deducted on partner's remuneration at 10%.

What is the golden rule of TDS?

TDS stands for Tax Deducted at Source. The Golden rule of accounts is Debit the receiver, Credit the giver. TDS is a tax deducted by the payer at the time of making payment.

What is the most overlooked tax break?

The 10 Most Overlooked Tax Deductions

• Out-of-pocket charitable contributions.
• Student loan interest paid by you or someone else.
• Moving expenses.
• Child and Dependent Care Credit.
• Earned Income Credit (EIC)
• State tax you paid last spring.
• Refinancing mortgage points.
• Jury pay paid to employer.

What raises red flags with the IRS?

Owning a small business such as auto dealership, a restaurant, a beauty salon, a car service or cannabis dispensary is an IRS red flag, as they typically have many cash transactions. Red flags are also raised on outliers – businesses with margins that are too low or too high.

What are the drawbacks of the new regime?

A key feature of the new regime is the limited scope for deductions. Taxpayers cannot claim most common deductions available under the old regime, including Section 80C (investments in LIC, PPF, ELSS, etc.), Section 80D (health insurance premiums), Section 80E (education loan interest), and House Rent Allowance (HRA).

Can I claim anything under the new tax regime?

Yes, Standard deduction of Rs.50,000 or the amount of salary, whichever is lower, is available for both old and new tax regimes from AY 2024-25 onwards.

What are the deductions allowed in the new tax regime for FY 2025-26?

For FY 2025–26, the new tax regime effectively makes income up to ₹12 lakh tax-free due to the enhanced rebate of ₹60,000. In addition, a standard deduction of ₹75,000 is available for salaried individuals, making a salary income of up to ₹12.75 lakh effectively tax-free.