Old vs New Tax Regime
Compare your tax liability under both regimes for FY 2024-25 and find out which one saves you more money.
Income & Deductions
Deductions (Old Regime Only)
Quick Tip
The New Tax Regime is now the default regime. If you want to opt for the Old Regime, you must explicitly inform your employer or select it while filing your ITR.
New Regime is better for you!
Detailed Breakdown
| Component | Old Regime | New Regime |
|---|---|---|
| Gross Salary | ₹12,00,000 | ₹12,00,000 |
| Total Deductions | -₹2,25,000 | -₹75,000 |
| Taxable Income | ₹9,75,000 | ₹11,25,000 |
| Base Tax | ₹1,07,500 | ₹68,750 |
| Cess (4%) | ₹4,300 | ₹2,750 |
| Total Tax Payable | ₹1,11,800 | ₹71,500 |
Which one to choose?
If you have high investments in 80C, 80D, and Home Loan, the Old Regime might still be better for you. However, for those with fewer investments, the New Regime with its lower slabs and higher standard deduction (₹75,000) is often more beneficial.
Tax Regime Guide
India currently has two tax regimes. The Old Regime allows for various deductions and exemptions, while the New Regime offers lower tax rates but removes most deductions.
New Regime (Budget 2024 Updates)
- Standard Deduction: Increased to ₹75,000 for salaried individuals.
- Tax Slabs: Revised to provide more relief in the ₹3L to ₹15L brackets.
- Rebate 87A: No tax for income up to ₹7 Lakhs (taxable).
Comparison Summary
Old Regime
Best for those with high home loan interest, high HRA, and full 80C/80D utilization.
New Regime
Best for those who prefer simplicity, lower tax rates, and don't want to lock money in long-term investments.
Tax Regime FAQs
Can I switch between regimes every year?
Salaried individuals can switch between the Old and New regimes every year at the time of filing their ITR. However, those with business income can only switch once in their lifetime.
Is standard deduction available in both regimes?
Yes. For FY 2024-25, it is ₹50,000 in the Old Regime and ₹75,000 in the New Regime.
What happens if I don't choose a regime?
The New Tax Regime is the default. If you don't specify, your tax will be calculated based on the New Regime.
Are 80C and 80D available in the New Regime?
No, most deductions under Chapter VI-A (like 80C, 80D, 80G) are not available in the New Tax Regime.