Tax Wellness

session
 II
Taxes I
in I
I
FY24 I
I I
II 2
Tax Regimes – NEW v/s OLD

Income slabs Old Regime New Regime

0-2.5L Exempt Exempt
2.5L-5L 5% 5%
5L- 7.5L 20% 10%
7.5L-10L 20% 15%
10L-12.5L 30% 20%
12.5L- 15L 30% 25%
15L and above 30% 30%

Major Deductions and exemptions are foregone in new tax regime

Tax Regimes – NEW v/s OLD

Income slabs New Regime from FY24

₹0-₹3,00,000 -

₹3,00,000 -₹6,00,000 5%

₹6,00,000-₹9,00,000 10%

₹9,00,000-₹12,00,000 15%

₹12,00,000-₹15,00,000 20%

Above ₹15,00,000 30%

New Regime becomes the default regime from April 1 2023

Deductions to be foregone if opting for NEW Tax Regime

Below are some noteworthy deductions that will not be available in the NEW regime

• Leave travel allowance (LTA)

• House rent allowance (HRA)
• Children education allowance
• Standard deduction on salary
• Deduction for professional tax Section 16(III)
• Interest on housing loan
• Deductions on specified investments – (Deduction under Section 80C towards contribution to
Public Provident Fund, repayment of principal on housing loan, children’s school fees, life insurance
premium, etc.)
& (other deductions towards medical insurance premium, interest on education loan, etc.)
Opting for the applicable tax regime

Switching to the new tax regime can be done either on a year-on-year basis or only once.
The frequency mostly depends on the source of income during the year

Every Only once -

subsequent year- Form 10IE Business or
Salaried Profession
Which regime do I choose?

Dennis and Rakesh are salaried taxpayers with no other sources of income

Details for FY 21-22 Rakesh Dennis

Income from Salary 20,00,000 20,00,000
Exemption for HRA 1,20,000 Nil
Exemption for LTA 50,000 Nil
Standard Deduction 50,000 50,000
Deduction u/s 80C for EPF,
150,000 150,000
PPF
Interest on education loan 2,00,000 2,00,000
Rakesh

Old Regime New Regime

Income from Salary 20,00,000 20,00,000
Less: Exemption for HRA 1,20,000 Not applicable
Less: Exemption for LTA 50,000 Not applicable
Less: Standard Deduction 50,000 50,000
Less: Deduction under Section
150,000 Not applicable
80C for PF
Interest on education loan 2,00,000 Not applicable
Net taxable Income 14,30,000 19,50,000
Tax on the above 2,41,500 2,85,000

We can see in the above example that the old tax regime is
beneficial to Rakesh as taxes are less by INR 43,500
Dennis - Does not have eligible exemptions for HRA, LTA

Old Regime New Regime

Income from Salary 20,00,000 20,00,000
Less: Standard Deduction 50,000 50,000
Less: Deduction under Section
150,000
80C for EPF
Net Income chargeable under
18,00,000 19,50,000
the head salary
Tax On the above 3,52,500 2,85,000

In case of Dennis, where deductions for HRA and LTA are not
applicable, the new tax regime is more beneficial by INR
67,500.
Where can I save
taxes?
Section 80 C

Investment Return% Lock-in

5- year Bank Fixed Deposit 6-7 5 Years
National Savings certificate 7-8 5 Years
ELSS Funds 12-16 3 Years
Sukanya Samriddhi Yojana 7.6 NA
Senior Citizen Saving Scheme 7.4 5 years
Sabse Pehle Term Insurance!
Which Term Insurance to consider?

Accidental
Death
Death 34 Critical
Benefit illness

All in one
Term Plan

Life term
Premium
coverage
waiver due
of 99 years
to disability
Option to pay
for shorter
period
I want protection but
I don't want it to be
an expense. Can I get
my money back?
 ‘Return of Premium’: An illustration

Premium: ₹21,187 p.a.

regularly

Life cover: ₹ 50,00,000

35 Year 65 Year

₹ 6,67.391
On survival till age 65:
Premium paid (p.a.): ₹ 21,187
Return of Premium: 21,187 x 30 x 105% = ₹ 6,67,391

For a 35 year old healthy male buying “Return of Premium”, regular pay, policy term of 30 years and Life cover of ₹50 lakhs.
Tax savings from Life Insurance

You can avail tax deductions on Life Insurance via the following sections -

• Section 80 C – Premiums qualify for deductions up to 1.5 lacs

• Section 80 D – Benefit of critical illness riders up to 25,000
• Section 10(10D) – Income on maturity is tax-free if sum assured >= 10 times premium
National Pension Scheme
Product Benefit
• Market linked returns, Lowest fund management charges. @0.01%
• Flexibility to invest in Equity, Debt and Govt. Securities based on risk appetite
• Flexibility to Actively manage investments or Auto-allocate based on life stage

Retail NPS Corporate NPS

Tier 1 NPS Tier 2 NPS

Tax savings from NPS

You can avail tax deductions on NPS via the following sections -

• Section 80 CCD (1) – up to 1.5 lacs

• Section 80 CCD (1B) – up to 50,000 additional exclusive deduction

• Corporate NPS plan – Tax exemption available on investment of 10% of the Basic Salary (up
to 7.5 lacs) on employer’s contribution
Public Provident Fund
A PPF or Public Provident Fund is a tax-free savings (EEE) scheme offered by the Government of India, wherein
interest on the account is set for every quarter and is paid by the government.

Period Interest Rate (%)

April to present 7.1%

January to March 2020 7.90
October to December 2019 7.90

July to September 2019 7.90

April to June 2019 8.0

January to March 2019 8.0

* Source : paisabazaar
Tax savings from PPF

You can avail tax deductions on PPF via the following sections -

• Section 80 – up to 1.5 lacs

• Interests are tax-free
• Proceeds are tax-free
Invest systematically and earn life long returns

21
Tax savings from ULIP

You can avail tax deductions on ULIP via the following sections -

• Section 80 – up to 1.5 lacs

• Withdrawals for premiums up to 2.5 lacs
Health Insurance
Feature Rich & Comprehensive Demographic Segmentation
• High OPD & maternity • 18 to 85 yrs. age coverage
coverage Income Segmentation
• No copay (up to 55 yrs.) • 5 to 25 lacs SI options
• No sublimit and room rent Behavior Segmentation
Feature Rich
limits
& High
Market • Wellness plan for PED Sr citizen
• Competitively priced and tax Segmentation customers
Payout
benefits

Cashless benefit to customer iMobile & RIB (DIY)

• OPD expenses Digital Digital buying • Buy in 3 simple steps
• e Pharmacy Servicing platform • Easy and convenient
• e Diagnostics • Demog auto populated
• Claims

Most comprehensive, feature rich and competitively priced health solutions

available digitally. Policy servicing and claims also available on a click of a
button.
Tax savings from Health Insurance

You can avail tax deductions on Health Insurance via the following sections -

• Section 80 D – up to 25,000 on self (less than 60 years)

• Medical insurance premium other than cash
• Contribution to a central government health scheme
• Preventive health check-up (up to 5,000)

• Section 80 D – up to 25,000 on parents (less than 60 years)

• Section 80 D – up to 50,000 on parents (greater than 60 years)*
Tax savings from Home Loan Interest
You can avail tax deductions on Home loan via Section 24 –
 Tax Benefits across Financial products
Deductions
Up to
1.5 Lacs
under Sec
80C

80 D Benefit –Health Insurance

EPF
Error!
EPF – The story of two accounts
Employee Employer
Contribution contribution

12% EPF A/C 8.33% EPS 3.67% EPF A/C

Exempt up to 12%
Deduction u/s 80c up
Or
Contribution to 1.5 lacs
Up to 7.5 lacs PA

Interest on Interest on
contribution in excess contribution in excess
Interest of 2.5 lacs per year of 7.5 lacs per year

Before 5 years of service

Withdrawal After 5 years of service
TAX FREE Resignation Other reason
TAXABLE TAXFREE
Final Words
Always invest for YOUR financial goals !
Spend less than your earn, start investing EARLY, and believe in power of compounding!
Diversify, Diversify, Diversify!
Invest for medium to long term. INVESTING HAS RISK but don’t run away from risk, learn to
know about it.
Don’t invest in what you don’t completely understand spend time to understand , take
help if necessary

“ Someone is sitting in shade today because someone planted a tree long time ago .’’ Warren Buffet
Thank you!