Question 1

What is the New Tax Regime in India?

Accepted Answer

The New Tax Regime (default from FY 2023-24) offers lower tax rates with simplified slabs: 0% up to Rs 3 lakh, 5% for Rs 3-7 lakh, 10% for Rs 7-10 lakh, 15% for Rs 10-12 lakh, 20% for Rs 12-15 lakh, and 30% above Rs 15 lakh. It includes a standard deduction of Rs 75,000 but does not allow other deductions like 80C, 80D, HRA, etc.

Question 2

Should I choose Old or New Tax Regime?

Accepted Answer

The New Regime is better if your total deductions (80C, 80D, HRA, etc.) are less than Rs 3.75 lakh. The Old Regime may be better if you have significant deductions like home loan interest, HRA, PPF investments, and health insurance premiums. Use this calculator to compare both regimes.

Question 3

How is EPF calculated in India?

Accepted Answer

Employee Provident Fund (EPF) requires both employee and employer to contribute 12% of the basic salary. The employee contribution is deducted from salary and is tax-deductible under Section 80C in the Old Tax Regime. EPF currently earns 8.25% interest per annum.

Question 4

What is the Health and Education Cess?

Accepted Answer

A 4% Health and Education Cess is levied on the total income tax amount (including any surcharge). This cess funds healthcare and education initiatives across India and is mandatory for all taxpayers.

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