Hi All,
I have a query regarding deductions under the new tax regime. As per the latest budget, only the general deduction of ₹75,000 and NPS contributions are allowed as exemptions. However, my question is about salary allowances - can benefits like food coupons, LTA, mobile and internet allowances, or car allowances, etc., be considered for employees under the new tax regime? I discussed this with a few colleagues, and they mentioned that it's not allowed, but they are unsure as there’s nothing explicitly stated in the law. Please suggest, and any link explaining this would be helpful.
Thank you.
From India, Pune
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I have a query regarding deductions under the new tax regime. As per the latest budget, only the general deduction of ₹75,000 and NPS contributions are allowed as exemptions. However, my question is about salary allowances - can benefits like food coupons, LTA, mobile and internet allowances, or car allowances, etc., be considered for employees under the new tax regime? I discussed this with a few colleagues, and they mentioned that it's not allowed, but they are unsure as there’s nothing explicitly stated in the law. Please suggest, and any link explaining this would be helpful.
Thank you.
From India, Pune
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Under the new tax regime in India, many traditional exemptions and deductions have been removed to simplify the tax structure. Here's how specific allowances are treated:
1️⃣ Standard Deduction
Allowed: A standard deduction of ₹75,000 is available for salaried individuals.
2️⃣ Food Coupons
Not Allowed: The exemption of up to ₹50 per meal for food coupons is not available under the new tax regime.
3️⃣ Leave Travel Allowance (LTA)
Not Allowed: LTA exemptions are not permitted under the new tax regime.
4️⃣ House Rent Allowance (HRA)
Not Allowed: HRA exemptions are not available under the new tax regime.
5️⃣ Mobile & Internet Reimbursements
Not Allowed: These reimbursements are not exempt under the new tax regime.
6️⃣ Car Allowances
Not Allowed: Car-related allowances are not exempt under the new tax regime.
7️⃣ Employer's Contribution to NPS (Section 80CCD(2))
Allowed: Employer contributions to the National Pension System (NPS) up to 14% of the basic salary are deductible under the new tax regime.
8️⃣ Other Deductions
Not Allowed: Deductions under sections like 80C, 80D, 80E, etc., are not permitted under the new tax regime.
Final Takeaway: Under the new tax regime, most traditional exemptions and deductions, including those for food coupons, LTA, HRA, mobile and internet allowances, and car allowances, are not available. However, the standard deduction and employer's NPS contributions are still allowed.
From India, Gurugram
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391️⃣ Standard Deduction
Allowed: A standard deduction of ₹75,000 is available for salaried individuals.
2️⃣ Food Coupons
Not Allowed: The exemption of up to ₹50 per meal for food coupons is not available under the new tax regime.
3️⃣ Leave Travel Allowance (LTA)
Not Allowed: LTA exemptions are not permitted under the new tax regime.
4️⃣ House Rent Allowance (HRA)
Not Allowed: HRA exemptions are not available under the new tax regime.
5️⃣ Mobile & Internet Reimbursements
Not Allowed: These reimbursements are not exempt under the new tax regime.
6️⃣ Car Allowances
Not Allowed: Car-related allowances are not exempt under the new tax regime.
7️⃣ Employer's Contribution to NPS (Section 80CCD(2))
Allowed: Employer contributions to the National Pension System (NPS) up to 14% of the basic salary are deductible under the new tax regime.
8️⃣ Other Deductions
Not Allowed: Deductions under sections like 80C, 80D, 80E, etc., are not permitted under the new tax regime.
Final Takeaway: Under the new tax regime, most traditional exemptions and deductions, including those for food coupons, LTA, HRA, mobile and internet allowances, and car allowances, are not available. However, the standard deduction and employer's NPS contributions are still allowed.
From India, Gurugram
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You need to know the difference between allowances, reimbursements, and benefits.
The new tax regime does not stop benefits given by the employer. But you will need to add these benefits as perquisites. You will pay tax on them. You will not be able to claim an exemption on them.
As your company's tax or accounting team, they will give you a better idea.
From India, Mumbai
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The new tax regime does not stop benefits given by the employer. But you will need to add these benefits as perquisites. You will pay tax on them. You will not be able to claim an exemption on them.
As your company's tax or accounting team, they will give you a better idea.
From India, Mumbai
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(Fact Checked)-Your explanation is spot on about the new tax regime. It's true that some allowances are now considered as perquisites and are taxable. Good job! (1 Acknowledge point)