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All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
The alternative personal income tax structure with different slab rates and substantially fewer exemptions and deductions than the old regime. The election belongs to the employee and drives their TDS for the year, which is why the comparison is best made on their own numbers.
Not automatically better or worse. Which regime costs less depends on the individual's declarations, and the answer differs between two people on identical salaries.
Each April, payroll asks every employee to state which regime they want TDS computed under for the year. If an employee says nothing, the new regime applies by default, so the declaration window matters for anyone who wants deductions such as HRA or 80C considered.
The choice changes how payroll treats the salary structure. Under the new regime, HRA, LTA and most exemptions are ignored for TDS, while the standard deduction and the employer NPS contribution still apply as notified. A side-by-side projection for each employee helps them decide.
A frequent mistake is treating the April choice as final. Salaried employees can generally choose differently when filing their return, so payroll should not refuse a proof submission merely because of the earlier choice. Slabs and rebates change with the Budget, so always check the current Finance Act figures.
An alternative personal income tax structure with different slab rates and far fewer exemptions and deductions than the old regime.
The employee; the election belongs to them.
It drives the employee's TDS for the year.
No. It depends on the individual's declarations.
Yes. The answer differs between two people on identical salaries.
On your own numbers, including your declarations.
Substantially fewer than the old regime.
Under Section 192, TDS is projected across the year against the regime election and verified declarations.
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