A taxpayer opting for new income tax slabs and rates will have to forego a host of exemptions and deductions, including a standard deduction of ₹50,000, tuition fee of children, and contribution towards insurance premium and provident fund. However, the new income tax system proposed by Finance Minister Nirmala Sitharaman in the Union Budget 2020-21 is optional and a taxpayer can choose to remain in the existing regime with exemptions and deductions.According to the proposal, those with an income between ₹5 lakh and ₹7.5 lakh, can now pay 10% instead of the present 20%, while those with an income between ₹7.5 lakh to ₹10 lakh, will see a reduced tax rate of 15% instead of 20%.Similarly, for income between ₹10 lakh to ₹12.5 lakh, the tax is currently 30% that is now being brought down to 20%. For those earning between ₹12.5-15 lakh will be charged 25%. Those earning above ₹15 lakh will continue to pay 30%.Accordingly, a person earning ₹15 lakh per anum and not availing any deductions will pay ₹1.95 lakh tax in place of ₹2.73 lakh now. Those earning upto ₹5 lakh in a year will pay no tax.Income (per annum)Proposed Tax RateOld Tax RateUpto ₹2.5 lakhNo taxNo tax₹2.5 lakh-₹5 lakhNo tax5%₹5 lakh to ₹7.5 lakh10%20%₹7.5 lakh to ₹10 lakh15%20%₹10 lakh to ₹12.5 lakh20%30%₹12.5 lakh to ₹15 lakh25%30%Above ₹15 lakh30%30%80C of Income Tax Act As per the Budget document, an individual taxpayer opting for the new tax regime will not be entitled for deduction under 80C of the Income Tax. Section 80C provides deduction for contribution towards insurance premium, deferred annuity, provident fund and certain type of shares. Taxpayer will also have to forego deduction under 80CCC (contribution towards certain pension fund), Section 80D (health insurance), 80E (interest on loan for higher education), 80EE (interest on loan taken for residential property), 80EEB (purchase of electric vehicle), 80G (donation to charitable institutions), and 80G (rent paid). Besides, a taxpayer opting for the new scheme will not get tax benefit for leave travel concession (LTC), allowances for income of minors, and certain allowances of MPs/MLAs. The tax benefit will not be available in respect of free food and beverages through vouchers provided to employees.However, certain deductions are proposed to be retained in the new regime, like conveyance allowance for meeting expenses in performance of duty and allowance for travel on tour and transfers.