9,580.3090.2
Stock Analysis, IPO, Mutual Funds, Bonds & More

90% taxpayers claimed less than Rs 2 lakh deductions in FY19: Govt

Income Tax Act offers deductions under section 80C - provident funds, life insurance premium, home loan principal repayment etc., health insurance premium under section 80D, additional Rs 50,000 dedution in NPS under section 80CCD (1B) etc.

, ET Bureau|
Last Updated: Feb 03, 2020, 08.15 AM IST
0Comments
Getty Images
tax6-getty
Non-salary earners stand to gain even more as they were not eligible for Rs 50,000 standard deduction.
ET Calculator Banner
Over 90% of total taxpayers that filed tax returns in FY19 claimed deductions of less than Rs 2 lakh, government sources said.

This includes deduction under section 80C – provident funds, insurance and other tax savings items, Mediclaim deduction under section 80D, section 80CCD(1B) that includes additional deduction of the NPS, deduction for housing loan interest and standard deduction.

In all, 5.3 crore out of total 5.78 crore tax filers in the FY 2018-19 claimed deduction of less than Rs 2 lakh. Only 3.77 lakh taxpayers have claimed deductions exceeding Rs 4 lakh.

Calculations shared by the government sources showed, under the new exemption less regime, a person claiming Rs 1.5 lakh deduction and Rs 50,000 standard deduction would stand to gain Rs 15,600 in tax if he switched to the new regime.

Under the same assumption, the old regime is better if the income before deduction is Rs 7 lakh to Rs 12 lakh.

The new regime benefits those most who for various reasons are not able to spare money from their income to invest in the various saving instruments and therefore are unable to take full advantage of all deductions.

These taxpayers would pay more under the old regime and benefit from switching to the new one. Non-salary earners stand to gain even more as they were not eligible for Rs 50,000 standard deduction. For them, gain is Rs 31,200 for incomes over Rs 15.5 lakh under the new regime if they were claiming Rs 1.5 lakh deduction earlier.

Scheme is also seen beneficial for pensioner or senior citizen who would typically not make any investment in provident fund or buying a home and may not be able to enjoy all deductions in the old system.

Also Read

TDS, TCS cut: More funds for taxpayers

Are taxpayers ignoring ELSS mutual funds this financial year?

Govt gives relaxations to taxpayers for GST compliance for filing annual returns and audits

Taxpayers nudged to opt for Vivaad Se Vishwas scheme

Non-taxpaying NRIs to be taxed in India: FM

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service