Is HRA rebate allowed in the new tax regime?

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).

Which deductions are allowed in the new tax regime in AY 2025-26?

Tax-free income in new tax regime (Financial Year 2025-26)

This means that individuals earning up to Rs. 12 lakh will have their tax liability effectively reduced to zero. For salaried employees, an additional standard deduction of Rs. 75,000 elevates the tax-free income threshold to Rs. 12.75 lakh.

Can I claim section 80D in the new tax regime?

The new tax regime has eliminated nearly 70 tax deductions that were previously allowed in the old regime. Under the new regime, deductions for health insurance premiums (Section 80D) and investments up to ₹1.5 lakh (Section 80C) are not available.

What are the key changes in the new tax regime?

The One Big Beautiful Bill that passed includes permanently extending tax cuts from the Tax Cuts and Jobs Act, including increasing the cap on the amount of state and local or sales tax and property tax (SALT) that you can deduct, makes cuts to energy credits passed under the Inflation Reduction Act, makes changes to ...

What is 60,000 rebate in the new tax regime?

Under the new regime, the rebate limit is ₹60,000 for resident individuals whose normal income does not exceed ₹12 lakh. This rebate applies only to tax on income taxed at slab rates. Income taxed at special rates, such as short-term and long-term capital gains, cannot be reduced using this rebate.

Which is better, a new or old tax regime?

Choosing between the Old and New Tax Regimes depends on your income level, deductions, and exemptions. For salaried individuals with minimal deductions, the New Regime is likely more beneficial due to relaxed tax slabs and a rebate up to ₹7 lakh or ₹12 lakh (based on updated 87A provisions).

What are standard deductions in the new tax regime?

Standard Deduction.

For tax year 2026, the standard deduction increases to $32,200 for married couples filing jointly. For single taxpayers and married individuals filing separately, the standard deduction rises to $16,100 for tax year 2026, and for heads of households, the standard deduction will be $24,150.

What is the maximum HRA exemption I can claim?

The maximum House Rent Allowance (HRA) exemption you can claim is 50% of your basic salary, provided you live in a metro city. The actual HRA tax exemption is calculated as the lowest of: Rent paid annually minus 10% of your basic salary. The HRA amount received from your employer annually.

How much rent can be tax-free?

The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. The threshold is halved to £3,750 if you share the income with someone else. You can let out as much of your home as you want.

Is TDS deducted on house rent more than 50000?

Key Takeaways. Any person (other than individual/HUF) paying annual rent above ₹6 lakh must deduct TDS at 10% for land/building/furniture/fittings and 2% for plant & machinery. Individuals or HUFs must deduct TDS if their rent payment exceeds ₹50,000 per month under Section 194IB, with a 2% TDS rate.

What deductions are not allowed in the new tax regime?

Which Exemptions and Deductions Are Not Claimable Under the New Regime?

• The standard deduction under section 80TTB/80TTA.
• Entertainment allowance and professional tax on salaries.
• Leave Travel Allowance (LTA).
• House Rent Allowance (HRA).
• Helper allowance.
• Minor child income allowance.
• Allowance to MPs/MLAs.

Can I deduct health insurance premiums?

You may be able to deduct the amount you paid for health insurance, which includes medical, dental, and vision insurance and qualified long-term care insurance for yourself, your spouse, and your dependents.

Is HRA considered in the new tax regime?

Under the old tax regime, House Rent Allowance (HRA) is exempted under section 10(13A) for salaried individuals. However, this exemption is not available in the new tax regime.

What are the rebates under new tax regime?

For the financial year 2025-26 (Assessment Year 2026-27), the rebate limit under the new tax regime has been increased to Rs. 12 lakh. Individuals with taxable income up to this amount are eligible for a rebate of up to Rs. 60,000 or the total tax payable, whichever is lower.

Is 80GG available in new regime?

No, the deduction under Section 80GG of Income Tax Act is applicable only to taxpayers opting for the old regime.

Are 80C and 80D applicable in the new tax regime?

The new tax regime provides lower tax rates but eliminates key deductions, including HRA, Section 80C, and Section 80D. While it simplifies tax filing, it may not be beneficial for taxpayers who rely on exemptions for rent, tax-saving investments, and health insurance.

How many times can I switch from new regime to old regime?

They are permitted to switch between these regimes only once during their lifetime. This rule means that once they make a decision, they must adhere to it permanently unless they cease their business activities. This one-time choice carries substantial implications.

Why is the new tax regime not good?

The new tax regime has lower tax rates but fewer deductions and exemptions compared to the old tax regime. The old tax regime has more deductions and exemptions but higher tax rates. Calculate income tax liabilities for yourself using an income tax calculator and talk to a professional before choosing a regime.

Which regime is better for 30 LPA?

Key takeaway to save tax on salary above 30 Lakh

If you have significant tax-saving Tax deduction, opt for the old regime. Salaried employees could claim benefits like HRA, LTA, conveyance allowance, daily allowances, medical reimbursement, and *Tax deduction under Section 80C under the old regime.