From PPF, EPF To Life Insurance, Here's A List Of Incomes Exempted Under The New Tax Regime

As per the new tax regime income tax rates would be lower for the individual taxpayers in case you let go deductions and exemptions for investments. However, you still continue to get income tax deduction/exemption on certain incomes.

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New Delhi, June 29: If you are one of those who are planning to opt for the new income tax regime from the next financial year then you should be aware of the exemptions and deductions to reap the benefit. As per the new tax regime income tax rates would be lower for the individual taxpayers in case you let go deductions and exemptions for investments in the insurance policy, NSC, PPF and others. Here are the income tax exemptions and deductions that you can still claim under the new optional regime for FY20-21 (Assessment year 2021-2022): PPF:  If you have a Public Provident Fund (PPF) then remember that the amount received on the maturity of PPF account along with the yearly interest credited to the PPF balance is not taxable. EPF: Also, in these trying times if at all you have to withdraw the Employees' Provident Fund (EPF) then remember it is not taxable. However, only if you withdraw after five years of continuous service. NPS: If you have to withdraw from National Pension Scheme either on maturity or premature withdrawal, then remember up to 40 per cent of the amount received on such withdrawal will be tax-free. The partial withdrawal from NPS, up to 25 per cent of the contributions is also tax free. In fact, employer’s contribution to NPS up to 10 per cent of their basic salary and dearness allowance is also tax free. Life Insurance: A lot of you may have taken a life insurance policies, so under Section 10 (10D) of the Income Tax Act, the sum assured and any bonus paid on maturity or surrender of the life insurance plan is tax free. The maturity proceeds remain exempted under Section 10(10D) even in the new regime. Other Benefits: Those investing in Sukanya Samriddhi Yojana for a girl child,  the maturity amount including interest received won't be taxed. Also, interest received from post office savings account balance up to Rs 3,500 yearly per individual is also tax free, besides scholarship granted to manage education costs also remain tax exempted under Section 10 (16) of the Income Tax Act. Conveyance Allowance:  Are you aware that the conveyance allowance that you avail to meet expenditure incurred on conveyance to perform duties of an office is tax free? Yes! In case of any allowance granted to an employee to meet the cost of travel on tour or on transfer (including relocation) are tax free. The Central Board of Direct Taxes (CBDT) has said that under the new income tax regime, employees can claim for tax exemption on conveyance allowance received from their employers. Leave encashment received at the time of resignation or retirement up to Rs 3 lakh. Gratuity: If you receive a gratuity from the employer up to Rs 20 lakh after completing five years of continuous service even that amount is tax free.