As a taxpayer, you should be aware that the new tax regime is now the default option. This means that if you want to take advantage of any tax deductions and exemptions, you will need to actively choose the old tax regime instead for income tax filing. Please remember that the deadline to file your income tax return for the financial year 2023-24 is July 31. Make sure to file on time to avoid any penalties.

For those who are new to this, the new tax regime was introduced in the Budget 2020. This regime offers lower income tax slabs and concessional tax rates. However, these benefits come with a trade-off: many traditional exemptions and deductions are not available under the new tax regime.
Despite this, there are still a few exemptions that taxpayers can take advantage of under the new tax regime. Here is a list of the exemptions that are still available:
- Employer’s Contribution to NPS: Contributions made by your employer to your National Pension System account are exempt under the new tax regime.
- Gratuity: Any gratuity received by an employee at the time of retirement or during employment is exempt up to a certain limit.
- Leave Encashment: Leave encashment received at the time of retirement is exempt up to a specified limit.
- Commutation of Pension: Commuted pension, i.e., a lump sum amount received instead of a pension, is exempt under the new tax regime.
- Voluntary Retirement Scheme (VRS): Amounts received under VRS are exempt up to a specified limit.
- Employer’s Contribution to EPF: Contributions made by your employer to your Employee Provident Fund account are exempt up to a certain limit.
Remember to consider these exemptions when choosing between the old and new tax regimes.
It is important to note that salaried taxpayers need to inform their employer about which tax regime they intend to follow during the year. If they do not communicate their choice for income tax filing, they will automatically remain in the default tax regime. In such cases, it will be assumed that they have not chosen to opt out of the default regime.