India New Tax Regime FY20-21

A guide to understanding the options on the Allsec Payroll Portal

Contents
 What is the new income tax regime
 Old and New tax regimes - compared
 4 Steps to setup the tax regime of your choice
 Step 1 – Submit your Compensation Plan / Flexi Benefit Plan
 Step 2 – Submit your Tax Investments for the year
 Step 3 – Check your Tax Calculator
 Step 4 – Submit your option on Tax Regime
 Frequently asked questions
New Tax Regime

 New tax regime is all about reduced tax rates and reduced compliances: The new
regime provides for concessional tax rates in regard to tax rates in the existing or old
regime.
 As most of the exemptions and deductions are not available, the documentation
required is lesser and the tax filing is easier.
Tax Slabs compared – Old vs New
Old Regime Annual income New Regime

Nil Upto 2.5 Lakhs Nil

5% 2.5 Lakh to 5.0 Lakh 5%

5.0 Lakh to 7.5 Lakh 10%

20 %
7.5 Lakh to 10 Lakh 15%

10 Lakh to 12.5 Lakh 20%

30 %
12.5 Lakh to 15 Lakh 25%

Above 15 Lakh 30%

Tax Regimes compared
Old Tax Regime New Tax regime
• In the existing Tax Regime, you can claim all Employee selecting this option are not eligible for
the deduction / exemption like Standard claiming following deduction / exemption (as
deduction, deduction for Professional Tax, applicable).
HRA, LTA, Interest on Housing Loan etc. • Leave Travel Allowance
• House Rent Allowance
• Chapter VI A deduction (for investments in PF, • Standard deduction
LIC, NSC etc.). In this option you can modify • Professional Tax
your Investment declaration throughout the • Interest paid u/s 24 on self-occupied or vacant
year and at the year end you need to submit house property
the actual Investment Proofs to claim the • Loss from house property cannot be adjusted
exemption. However, employee is entitled to against salary or any other head of income
change the different option in next year. • Chapter VIA deductions (except Employer’s
contribution to National Pension Scheme) -
• Note that this declaration is for the purpose of Few deductions listed below are not allowed
TDS only and employee has to again select Investments / Payments made u/s 80C
the option at the time of filing their Income Medical Insurance Premium u/s 80D
Tax Return. Interest on Education Loan u/s 80E
Interest for home loan u/s 80EEA
Donations made u/s 80G
Savings bank account interest u/s 80TTA
Tax Regimes compared
Old Tax Regime New Tax regime
If individual tax payers choose to opt for The new tax slabs suits to those who do not wish
exemptions, they will be subject to the old tax to avail any deductions / exemptions under the
regime. tax regime.

For individuals earning below ₹5 lakh, there is The tax rates provide relief for people near the
no change in the tax rate. bottom of the pyramid.

The government has removed over 70

exemptions and deductions from over 100
Deductions allowed under old tax regime:
exemptions and deductions as provided in the
old regime.
• Deduction section under 80C, 80CC, 80CCD
Deduction / exemption like below are allowed:
• 80G, 80GG, 80GGA, 80GGC
• Standard deduction on rent
• 80E, 80EE, 80EEA, 80EEB
• VRS proceeds
• Deduction under section 80D, 80DD, 80DDB
• Agricultural income
• 80IA, 80-IAB, 80-IAC, 80-IB,
• Retrenchment compensation
• Income from life insurance
• Leave encashment on retirement
Setup the Tax Regime in 4 easy steps

Compare
Check

Submit your Your Tax calculator

Make your tax
Compensation is now updated.
investment Decide the tax
Plan/ Flexi Benefit Edit if required.
declarations based regime that suits
Plan Compare the taxes
on what you can you
for old and new
afford. Be realistic
regimes

Update Submit
Submit your Compensation Plan
Submit your Compensation Plan or Flexi Benefit Plan if you have not already done

Make your Tax investment Declarations

Unless you submit your tax declarations with a realistic set of investments the tax calculator cannot
yield accurate results
 Tax Calculator – An Indicative tool

This is where you

select and Submit

Box displays the

breakdown of
the old and new
tax regimes at
each stage of
your tax
computation.
Compare Annual
Tax Liability
Employees should key in Exemptions Under Section 10 based on bills that will be
before you
submitted and Taxable Reimbursement under Gross Income to arrive correct tax liability.
submit
The Tax calculator and its values are indicative and aids in decision making. The actual decision to go with an appropriate tax regime is an employees responsibility. This Tax Calculator is intended to
provide you the tax liability for the new / old tax rate based on the details entered by you. As an employee you are responsible for entering the correct details to arrive the projected income &
deductions / exemption and to compute the tax liability as per the income tax act and decide on the option. Allsec or your Employer are not responsible in any manner for the values and the option
selected by you.
FAQs
What is advantage or the benefit in the new tax regime?
• If you want higher take home gross salary, then to some extent one can use this option. In other words,
if one does not availing the deductions / exemptions benefits allowed under the income tax act then
they too can use this new tax regime option
What are the deductions / exemptions that are not allowed in the new tax regime?
• The following deductions / exemption are not allowed if one opt for the new tax regime. A
comprehensive list is expected to be published by the CBDT.
• House Rent Allowance
• Leave Travel Allowance
• Certain allowances prescribed under section 10(14)
• Standard deduction of Rs.50000/- and deduction for professional tax
• Deduction of interest payment on housing loan for self-occupied property restrictions on set-off of loss
from let out property
• Chapter VIA deductions (except Employer’s contribution to National Pension Scheme);

Whether it is mandatory to exercise the new tax regime or old tax regime?
• No. It is not mandatory to exercise either the new tax regime or the old tax regime. You can select the
new tax regime if you think it is beneficial. Otherwise, no need to select any option.
FAQs What are the deductions / exemptions that are allowed in the new tax regime?
• If The following deductions / exemption are allowed in the new tax regime. A comprehensive list is
expected to be published by the CBDT.
• Gratuity received at the time of Retirement
• Retrenchment Compensation received
• Amount received on Voluntary Retirement
• Commutation of Pension
• Employer Contribution to PF and NPS
• Withdrawal of NPS on Closure of Account or maturity

How to determine whether the new tax regime or old tax regime is beneficial?
• You may visit Allsec Tax Calculator and Selection of Tax Regime page, key in the income and deduction /
exemption details to arrive at the tax liability for both the new tax regime and old tax regime. You need
to ensure the accuracy of the income and deduction / exemption details to arrive the correct tax liability.
Depending on the result you may decide on which tax regime is beneficial to you.

What will happen if I don’t opt for the new tax regime?
• Your tax liability will be computed based on existing old tax regime / rates.

Can I change the option in mid of the financial Year ?

• If you have not selected any option till that period, then you can opt for the new tax regime in mid of the
financial year. However, if you have made any selection on the tax regime such as new tax regime or old
tax regime in the Allsec ESS portal then you cannot change such option in mid of the financial year.
FAQs Can I change the option in the next financial Year ?

• Yes. Irrespective of the option you have selected in the current financial year 2020-21, you are entitled to change to any
option in the subsequent financial year 2021-22.

I have taken a home loan. After considering my rental income, property tax and NAV the final value arrived is
positive. i.e. I have positive income from house property. Whether, I can declare this amount under new tax
regime?
• Yes. If you have positive income from on housing loan / income from house property then you can declare such income in
the new tax regime.

If I select for new tax regime, whether it is beneficial to opt for flexi benefit options or claim
reimbursements?

• No. The flexi benefit / reimbursement claims (like Leave Travel Allowance) are taxable. Comprehensive list is expected to
be published by the CBDT.

If I select for new tax regime, Whether it is beneficial to declare and submit tax investments?

• No. You are not required to do any declarations as the exemptions / deductions are not allowed in the new tax regime. If
you have already declared, then such details will not be considered while computing your tax liability.

I have already completed by tax investment declarations and now opted for new tax regime. What will
happen to investment declarations? Whether I need to remove my investment declarations?

• You are not required to remove any investment declarations that are updated prior to selecting the new tax regime. Your
investment declarations will not be considered while processing payroll and computing your income tax liability.
 Disclaimer

The tax calculator has indicative values based on your latest tax computation
and tax investment declarations. Your actual income could vary during the year
on account of various reasons.

You are required to update the actual values that you may earn during the year
before finalizing your tax regime option.

Once selected the option will be frozen for this financial year and your taxes will
be calculated accordingly. In case no option is selected, your taxes will be
computed under older rates with eligible exemptions.

Allsec or your Employer is not responsible for the choice you are making.