'Zero' income tax up to 13.7 lakhs..!? How?
'Zero' income tax up to 13.7 lakhs..!? How?
In the Union Budget, Finance minister Nirmala Sitharaman unexpectedly announced zero income tax under the new income tax system with tax rebates up to 12.00 lakhs. The Finance minister has given statistics that with this announcement, 1 crore people will no longer have to pay income tax. Although it has been announced that there is no income tax up to 12.00 lakhs, there are many benefits beyond that under the new income tax system, through which monthly salary earners and those earning an annual salary of up to 13.7 lakhs will no longer have to pay a single rupee as income tax. How is this..? There is an opportunity for monthly salaried people to significantly reduce their income tax burden called NPS (National Pension Scheme). Through this, monthly salaried people can avoid paying taxes up to Rs. 13.7 lakhs per year under the new income tax system. This is considered a huge profit compared to the Rs. 12 lakhs that non-salaried individuals get. This additional tax exemption is available through two main things: the standard deduction of Rs. 75,000 and investment in NPS. Everyone is talking only about the tax exemption of up to Rs. 75,000 through standard deduction beyond 12 lakhs. However many have forgotten the benefits available through NPS investment.
In the Union Budget, Finance minister Nirmala Sitharaman unexpectedly announced zero income tax under the new income tax system with tax rebates up to 12.00 lakhs. The Finance minister has given statistics that with this announcement, 1 crore people will no longer have to pay income tax. Although it has been announced that there is no income tax up to 12.00 lakhs, there are many benefits beyond that under the new income tax system, through which monthly salary earners and those earning an annual salary of up to 13.7 lakhs will no longer have to pay a single rupee as income tax. How is this..? There is an opportunity for monthly salaried people to significantly reduce their income tax burden called NPS (National Pension Scheme). Through this, monthly salaried people can avoid paying taxes up to Rs. 13.7 lakhs per year under the new income tax system. This is considered a huge profit compared to the Rs. 12 lakhs that non-salaried individuals get. This additional tax exemption is available through two main things: the standard deduction of Rs. 75,000 and investment in NPS. Everyone is talking only about the tax exemption of up to Rs. 75,000 through standard deduction beyond 12 lakhs. However many have forgotten the benefits available through NPS investment.
Despite the huge tax benefits of this structure, only a small number of people avail the benefits of NPS. The NPS scheme, which was launched almost 10 years ago, has only 22 lakh subscribers. There are two main reasons for this low participation of people: There is a long lock-in period for NPS contributions, and there are also restrictions on withdrawal of the maturity amount. This is not the case with other investments.