ITR Filing Guide: How to Pay Zero Tax Under New and Old Regimes
As taxpayers prepare for the upcoming filing season, understanding the nuances of tax rebates can be the difference between a heavy tax bill and zero liability. While many confuse the basic exemption limit with tax-free income, the real mechanism for achieving "zero tax" lies in the Section 87A rebate.
Understanding the Section 87A Rebate
The Section 87A rebate is a provision under the Income Tax Act that provides tax relief to resident individuals whose total income falls below specific thresholds. It is important to note that the rebate is applied after the tax is calculated based on applicable slabs but before the addition of cess.
The amount of relief you receive depends entirely on which tax regime you select. Under the Old Tax Regime, a rebate of up to ₹12,500 is available for those with a taxable income of up to ₹5 lakh. Conversely, the New Tax Regime offers a much more significant benefit, allowing individuals with total income up to ₹12 lakh to claim a rebate of up to ₹60,000, effectively reducing their tax liability to zero.
The New Regime: Higher Limits and Marginal Relief
The New Tax Regime has become increasingly attractive due to its higher rebate threshold. For example, if an individual has a total taxable income of ₹9 lakh, they will not pay any tax despite being above the basic exemption limit of ₹4 lakh, thanks to the Section 87A rebate.
A critical feature of the New Tax Regime is "Marginal Relief." This serves as a safety net for taxpayers whose income slightly exceeds the ₹12 lakh threshold. Marginal relief ensures that the tax payable is not higher than the amount by which the income exceeds ₹12 lakh. This protection is available for total taxable incomes up to ₹12,70,588. If your income rises above this specific limit, marginal relief is no longer applicable, and you must pay the full tax as per the slabs.
Comparative Analysis: Old vs. New Regime
The choice between regimes often depends on your ability to utilize deductions. In the Old Regime, taxpayers can leverage Section 80C deductions (up to ₹1.5 lakh) and other exemptions to bring their taxable income down to the ₹5 lakh mark to claim the ₹12,500 rebate.
En el Nuevo Régimen, la deducción estándar se ha incrementado a ₹75,000, y el camino hacia el impuesto cero es mucho más amplio, extendiéndose hasta un nivel de ingresos de ₹12 lakh. Sin embargo, los contribuyentes deben ser cautelosos: el beneficio fiscal de la Sección 87A en el Nuevo Régimen no se aplica a los ingresos gravados con tasas especiales, como las ganancias de capital o los premios de lotería. Del mismo modo, bajo el Régimen Anterior, la desgravación no puede reclamarse contra las ganancias de capital a largo plazo derivadas de acciones o fondos orientados a renta variable bajo la Sección 112A.
Conclusiones clave
- Umbrales de impuesto cero: Puede lograr una responsabilidad fiscal de cero bajo el Nuevo Régimen con ingresos de hasta ₹12 lakh (mediante una desgravación de ₹60,000) y bajo el Régimen Anterior con ingresos de hasta ₹5 lakh (mediante una desgravación de ₹12,500).
- Beneficio de alivio marginal: Bajo el Nuevo Régimen, los contribuyentes que ganan ligeramente por encima de ₹12 lakh están protegidos por el alivio marginal, siempre que su ingreso total imponible se mantenga por debajo de ₹12,70,588.
- Se aplican exclusiones: La desgravación de la Sección 87A no es aplicable a ciertos ingresos con tasas especiales, como tipos específicos de ganancias de capital, en ambos regímenes fiscales.