4 Deductions People Can Claim under the New Tax Regime
As a measure to cut down the income tax rates, Finance Minister Nirmala Sitharaman has removed about 70 commonly used tax exemptions and deductions for employees in Budget 2020. Additionally, other most commonly available deductions like section 80C, 80D, standard deduction of 
50,000, HRA, NPS contribution, Leave Travel Allowance (LTA), medical insurance and more have also been restricted. Although not all benefits have been curbed, some contributions made towards Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) would continue to avail the tax exemption. Here are a few tax deduction people can claim under the new tax regime.
Gratuity
Usually, employees get eligible for gratuity from their organization after serving in the same company for five years or more. The income tax law exempts about Rs 20, 00,000 in a lifetime for employees working in a private sector, while, government staffs have no upper-limit on tax-free gratuity amount. This taxation rule is carry forwarded in the new tax slabs as well.
Pension
Employees working for a private organization would have one-third of the commuted pension tax exempted if they receive gratuity, but, if the employees do not receive gratuity, then only half of the commuted pension would be tax exempted. On the other hand, the lump-sum pension would continue to be tax exempted under the new slab as well.
Home Loans
In the new tax regime, the home loan interest has been eliminated this is one of the major deductions in the tax regime, but this applies only for the self-occupied property. Those taxpayers who have taken a loan on the rented property could claim deduction under section 24(b) under the new tax regime.
PPF and SSY Interest
The deduction on investments made to Public Provident Fund and Sukanya Samriddhi Yojana has been terminated in the new tax law. But, the interest accumulated for both the scheme would be tax exempted. Furthermore, under the new tax slabs, PPF and SSY would not hold EEE (Exempt Exempt Exempt) tax status. Similarly, tax benefits on life insurance premiums would not be available under the new tax slabs. But, the policy maturity would be tax-exempt under section 10(10D).
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