Old Tax Regime Vs New Tax Regime!!

Choosing between the Old Tax Regime and the New Tax Regime in India depends on the income structure and how many deductions or exemptions we claim. Here’s a simplified comparison to help

✅ Old Tax Regime

Allows Deductions & Exemptions like:

• Section 80C (Investments in PF, PPF, ELSS, LIC, etc.)
• HRA (House Rent Allowance)
• Standard Deduction (₹50,000 for salaried employees)
• LTA, Home Loan Interest, etc.

📊 Slabs (as of FY 2024–25):

• ₹0 – ₹2.5 lakh → NIL
• ₹2.5 – ₹5 lakh → 5%
• ₹5 – ₹10 lakh → 20%
• ₹10 lakh+ → 30%

Best For: Those who claim deductions/exemptions and make tax-saving investments.

---

✅ New Tax Regime

No major deductions or exemptions allowed (except NPS, employer EPF contribution, etc.). As per the finance bill, 2025 (Union Budget changes 2025) irrespective of the age.

📊 Simplified Slabs (as of FY 2025–26):

• ₹0 – ₹4 lakh → NIL
• ₹4 – ₹8 lakh → 5%
• ₹8 – ₹12 lakh → 10%
• ₹12 – ₹16 lakh → 15%
• ₹16 – ₹20 lakh → 20%
• ₹20 – ₹24 lakh → 25%
• Above ₹24 lakh → 30%

Best For: Those with no major investments or who want a hassle-free tax filing process.

---

---

🔍 Which One Should we select?

Scenario	Recommended Regime
You claim deductions (80C, HRA, etc.)	Old Regime
You have minimal deductions	New Regime
You prefer simplicity over saving	New Regime
Your salary structure includes perks	Old Regime (usually)

---

✅ Some Very Important Points:

Under the New Tax Regime, most of the exemptions and deductions are not available, including deductions for donations under Section 80G.

❌ What is Not Allowed in New Regime:

• Section 80C (Investments like LIC, PPF, ELSS, etc.)
• Section 80D (Medical insurance)
• Section 80G (Donations to charitable trusts and institutions)

✅ What is Still Allowed in the New Regime (as of FY 2024–25):

• Standard Deduction of ₹50,000 (for salaried & pensioners)
• Employer’s contribution to NPS (Section 80CCD(2)) – up to 10% of salary
• Rebate under Section 87A (income up to ₹7 lakh → No tax)