Slight correction- Education loan & principal part of home loan is covered under 80C. Even if NPS is taxsaver, you are paying out of pocket for future benefit so that's indirect. While new scheme will deduct 7 lakh directly from your taxable income. Plus it allows deduction of interest on home loan in a rented out property. Isn't NPS also covered under new tax regime?
Education Loan - 80E - Over and above 80C. No celieng limit.
NPS - 80CCD (1b) - upto Rs.50K Over and above 80C.
80CCD(2) - upto 10% of salary - employer's contribution - many companies have this. It falls within Rs.1.5Lakh of 80C.
NPS has no benefit under new tax regime.
Medical - 80D - Rs.25K over and above 80C
80DD - upto 1.25Lakh over and above 80C
Donation - 80G - upto Rs.25K over and above 80C. Many really good NGOs will go under gradually, when the malignant NGOs will continue to enjoy the patronage from overseas.
Home Loan Interest - Section 24 - Rs.2 Lakh. Over and above 80C.
Section 24 (b) - No limit for rental property. Over and above 80C.
Additional benefit of Old Tax Regime:
1. Young workers are encouraged into saving money for future which aligns with Indian traditional mindset and which has provided much needed support for Indians in many critical junctures of the economical storm that India had faced till date.
2. People are encouraged to invest in life insurances and medical insurances, which create a layer of security that the Govt doesn't have to cater to.
3. The money put in such savings still gets infused into economy, although in a safer insturments such as bonds and largecap companies. This way the corporates get access to the necessary funds in form of loans/corporate bonds and also the overall market volaitility is balanced.
4. Every segment that is needed to be focused on, can be introduced to the public through tax exemptions/deductions. Like the infrastructure bond of FY2011-12 where Rs.20K was allowed to be exempted over and above 80C. They can't do it with new regime as the whole purpose will be a failure and they look stupid - i.e. true self.
5. Deductions in home loan actually impacts the economy both negatively as well as positively. The home as asset lures in many investors which in turn keeps a very large sector in the market afloat. Reduction in demands in home loans will negatively impact banks and other financial services companies, various housing sector companies like cement, steel, plywood, wires and cables etc. which actually provides a very large segment of organised workforce. The negative part is seen in cities like Mumbai and Bangalore where the housing market touches heavens, forcing common people out or pour in all their savings, leaving little for consumption.
So, judge yourself. The consumption that Modi wants to increase will come at a cost.
Yes, there is some not so little benefits in new tax regime for a man who doesn't have any such savings. But, are those savings good or bad for the society and the overall economy? What happens when majority of people switches to the new tax regime and a consumption driven economy - mimicking the West takes root in India. Would it be able to survive an Adani moment?
Heck, is Adani the Lehman Brothers for India?