New Tax Regime – Deductions You Can Not Claim (section 115BAC)

First of all, let me tell you that the new tax regime is optional. An individual can either opt for old tax regime or new tax regime. Under old tax regime, an individual can still opt for all the tax deduction which are available for FY 2019-20. But it is not the same case with new tax regime, you can not claim deductions under most of the sections which were previously available.

So, under new tax regime in Budget 2020, which are the deductions which you can not claim. Here is a list of deductions which a normal salaried employee claim in his/her ITR . The list is not exhaustive but I have tried to cover most of it for the salaried employee

1. Section 80C

1. Provident Fund (PF) and Voluntary Provident Fund (VPF)
2. Public Provident Fund (PPF)
3. National Savings Certificate (NSC)
4. Life Insurance Premium (Though I feel, there will be a new section introduced for claiming life insurance premium in new tax regime)
5. NPS Employee contribution can not be claimed (NPS employer contribution would be eligible for deduction)
6. Equity Linked Savings Scheme Mutual Funds (ELSS)
7. 5-Year Bank Deposits5-Year Post Office Time Deposits
8. Senior Citizens Savings Scheme (SCSS)
9. Home Loan Principal Repayment
10. Stamp Duty and Registration Charges
11. Child Education Expenses(Tution Fee)

2. Section 80D Deduction

1. Health Insurance Premium for you and your family
2. Health Insurance Premium for your parents

3. Leave Travel Allowance

4. House Rent Allownace

5. Section 24 – Home loan interest under Section 24 can not be claimed if you opt for new tax regime.

6. Section 80CCD- contribution of 50,000 which was eligible for additional tax deduction in NPS can not be claimed.

 Section 80DD Deduction

Section 80DD exemption is for the amount spent on dependants like spouse, children, parents, brothers or sisters. This also can not be claimed.

Section 80DDB Deduction for AY 2019-20

You can also claim exemption under section 80DDB, if you are spending on treatment for certain specified ailments notified by the government.

The following are the ailments which will qualify for this exemption:
1. AIDS
2. Renal Failure
3. Cancer
4. Haematological Disorder
5. Neurological Issues

This also can not be claimed.

Other Sections

80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC can also not be claimed under deduction

New or Old – Which tax Regime should I choose?

You need to choose it cautiously. If you are in 5% bracket, it would not make much difference, whether you choose the old regime or new one.

For individuals claiming deductions like 80C, 80D, 80 CCD, HRA, Section 24, the old regime seems to be better..

The new tax regime looks better for the people who claim less deductions. Again its on case to case basis.