However, the government has also made it clear that people with personal income can choose old and new tax option on the basis of their convenience every year. Tax experts say that the new tax structure has its advantages and disadvantages. It depends on what is the annual income and investment of a person. Today we will know about this new tax structure, which people of which income group benefit the most from it. How will this affect the attitude of investors. We will also see what is the difference between the new and old tax structure and what will be its effect. After this we will try to know what will be the investment options.
How much tax will be saved without tax exemption
Suppose a person does not make any tax deduction or exemption claim while filing income tax. If someone's salary is Rs 7.5 lakh annually, then under the old tax system, they will have to pay Rs 54,600 as tax.At the same time, under the new tax structure, his tax becomes 39 thousand rupees. Thus, in the new tax structure, they will get an advantage of Rs 15,600 annually. Similarly, if someone's salary is Rs 10 lakh per annum, they will have to pay Rs 1,06,600 under the old tax structure and Rs 78,000 under the new tax structure. Under the new tax structure, people with a salary of Rs 10 lakh per annum will get a benefit of Rs 28,600.
Accordingly, people with salary up to Rs 12.5 lakh, Rs 15 lakh and Rs 20 lakh annually will be able to save Rs 49,400, Rs 62,400 and Rs 62,400 respectively. But, with this savings you have to pay attention that people of any income group are not claiming any deduction.
Also read: PPF, Sukanya, all these government schemes can reduce profits, know why
How much tax will have to be paid on availing tax exemption
Now suppose that a person claims a standard deduction of Rs 50,000, Rs 1,50,000 under section 80C and Rs 25,000 tax exemption on medical under section 80D. In such a situation, you will pay Rs 18,200 under the old tax system and Rs 39,000 under the new tax structure on earning of 7.5 lakh rupees annually. That is, they will have to pay 20,800 rupees more tax in the new tax structure.
A tax of 70,000 rupees under the old tax structure and 78 thousand rupees under the new tax structure on annual income of Rs 10 lakh. That is, under the new tax structure, they will have to pay Rs 7,800 more annually.
A tax of Rs 1,24,800 under the old tax structure and Rs 1,30,000 under the new tax structure will have to be paid on earning of Rs 12.5 lakh annually. Here they will have to pay Rs 5,200 more tax.
However, people earning Rs 15 lakh and Rs 20 lakh annually will have to pay tax of Rs 2,02,000 and Rs 3,58,000 respectively under the old tax structure. Whereas under the new tax structure, they will have to pay tax of Rs 1,95,000 and Rs 3,51,000 respectively. That is, a person earning 15 lakhs and 20 lakhs per annum will save Rs 7,800 under the new tax structure.
What does the government want
After seeing these two examples, one thing becomes clear that if someone does not claim tax exemption, then they are saving under the new tax structure. In particular, this benefit is getting the most from those people, who earn 10 lakh rupees annually. Tax experts say that the government has made one thing clear with this new tax structure. The government wants the common people not to get caught in the tax exemption, even if they pay tax at a lower rate than before.
Also read: Forget FD! If you take advantage of this facility of the bank, you will get more profit sitting at home.
For whom can a new tax structure be a better option
Vinod Dixit, MD and CEO of Escorts Securities, said about the new tax structure, "The new tax structure will especially benefit those whose annual earnings will be up to Rs 10 lakh. Earlier, high-income people used to invest in the affair to save tax. Most of his investment was able to give the benefit of tax exemption. They also do not get help in beating inflation. The focus of the higher salaries was that they should adopt some investment instruments, where the benefit of tax exemption will be given.
Dixit also said that those who used to take the benefit of tax exemption earlier, they should hardly leave their habit and adopt the new tax structure. But the new tax structure can become a better option for the new generation.
The scope of risky investment options may increase
Experts believe that the new tax structure of the government will also change the attitude of investing people. Instead of low interest and tax rebate option, they will focus more on such investment tools, where they will get more interest in less time. Such as debt or equity investment. These investment tools (Investment Tools) will also have higher liquidity. The new generation is more inclined to spend on lifestyle and experience. Experts said that people will have more confidence in high-risk investment tools.
People's expenses will increase
Ajay Kedia of Kedia Commodity says, 'The government wants those who were previously forced to save by taking advantage of tax exemption. But after the new tax structure, now they will focus more on spending. People will now rely more on options in equity and debt markets than traditional investments. They will have more faith in Mutual Fund and Equity Market rather than on any guaranteed return with tax rebate.
Systematic Investment Plan can become a better option for them. You will be able to invest more on gold and other properties. Economy will also benefit from this. Most people in India have their own house. Common people will spend on their second home or property.
Also read: Modi government sent 50 thousand crores to farmers' account, how much benefit to which state
Kedia said that one of the reasons for this is that in the last 10 years this market has grown more than before. The interest of people to invest in the share market has increased. The first reason for this is that returns are good in the long run. The second reason is that after the past few years in the case of scam in banks, people's trust in the banking sector has weakened.
At the same time, no such case has been revealed about mutual funds. The biggest reason for this is that the people managing mutual funds are qualified fund managers and enlistees. Also, the rules in this area are strictly complied with. Regulation is quite strong.
There will be big earning opportunities for those adopting new tax structure
Those taking advantage of the new tax structure will rely more on the option with high risk reward ratio. For this, they will have options like share market, commodity market, currency market.
mutual fund: Mutual fund companies raise money from investors and they invest this money in shares. Mutual Fund Investment is considered a good option for those who know less about investing in the stock market. For this, you can invest through any mutual fund website. Apart from this, mutual fund advisors can also be used. Currently in the market, there is an option of equity mutual funds, debt mutual funds, hybrid mutual funds and solution mutual funds.
Currency Market: Just as shares are traded in the stock market, the currency of many countries is traded in the forex market or foreign exchange market. For this, a trading account has to be opened with a forex broker. In this market, one currency is replaced by another currency. The most important thing in this type of trading is the exchange rate.
Also read: Should you know more tax exemption, know this, CBDT chairman has overcome your concern
Commodity Market: The act of buying and purchasing a commodity through an exchange is called Commodity Trading. Where various commodities are traded online. Through this, we trade in agri products (eg wheat, oil, cotton, soybean) and non-agri products (base metal, gold-silver) etc.
Share Market: The shares of listed companies are traded in the stock market. These shares are bought or sold through the Stock Exchange, where the companies are listed. If you bought a share for 10 rupees and after some time you are getting 15 rupees, then you get a profit of 5 rupees on one share.
Overall, people who rely on the old tax structure will continue to enjoy the benefit of tax rebate through traditional investment. At the same time, after the introduction of new tax structure, people will invest more money in some tool by paying tax at a lower rate, so that they can get better return on investment. For this, their tendency to take risks will also increase. Such people will have the facility of liquidity and will be able to spend more in the market. Experts say that people who want to focus on low and guaranteed returns will get the benefit of the new tax structure, trapped by the temptation of low tax exemption.
Also read: You have also taken LIC policy, then know what will be the effect of this decision of the government