If people are on the old tax regime, there are multiple ways in which the tax exemption can be made. Rental income or HRA is one such way to get some tax rebate. This is one of the biggest reasons why some people still stick to the old tax regime. Others who don't have HRA pick the new tax regime straight away, and that's good. As I mentioned in one of the recent articles, the government is trying to make people adopt a new tax regime instead of the old tax regime. This way, the taxation process is simple, and it is also beneficial to people.
Today I read an article that said that TDS has to be deducted for rentals more than 50000. It is not very common for people to pay a rental income of 50,000 to someone, but in some cities, that can be the case. The cost of living can be high in those countries, making people pay 50000 Rs for a good home. The TDS deduction has to be done before paying the rent to the landlord. Some people might even think that it can be a headache and they might pay less than 50000.
India is one of the heavily taxed countries in the world, but some countries tax more than India. I don't know if this is a new rule or not, but I hear this only now, and it is also good to know so that we don't go beyond 50000 as rental income. I think in the years to come, there will be new offers or better slabs available in the new tax regime, so that it is always a benefit for people to move to the new tax regime than the old tax regime.
Already, people who don't have any big deals in the old tax regime are switching to the new tax regime. This way, taxation is very easy. We don't have to submit any proofs or anything. Submitting Income Tax Returns is a very simple process if it is a new tax regime. I think the concept here is that India is slowly becoming a country that has simple taxation, and maybe in the future, when the government is self-sustaining, it would be great if they introduce some standard rates or even reduce the tax slabs.
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