Old Vs New Income tax Regime

Mar 15, 2025

Old Regime New Regime
  • ₹0 - ₹2.5 lakhs: Nil
  • ₹2.5 lakhs - ₹5 lakhs: 5%
  • ₹5 lakhs - ₹10 lakhs: 20%
  • Above ₹10 lakhs: 30%
  • ₹0 - ₹3 lakhs: Nil
  • ₹3 lakhs - ₹7 lakhs: 5%
  • ₹7 lakhs - ₹10 lakhs: 10%
  • ₹10 lakhs - ₹12 lakhs: 15%
  • ₹12 lakhs - ₹15 lakhs: 20%
  • Above ₹15 lakhs: 30%

Tax Rebate: Available up to ₹5,00,000 income. 0 tax if income is up to ₹5.5 lakhs with deductions.

Tax Rebate: Tax Rebate upto ₹7,00,000 Income upto ₹7.75 Lakhs- 0 Tax

Deductions and Exemptions Comparison

  • Standard Deduction- ₹50,000
  • House Rent Allowance
  • Leave Travel Allowance
  • Section 80C (e.g., LIC, PPF, ELSS)
  • NPS contribution by employer under Section 80CCD(2)- upto 10% of Basic+ DA
  • Section 80D (Health Insurance)

  • Section 24(b) (Home Loan Interest)

  • Standard Deduction- ₹75,000 No deductions or exemptions allowed (except for employer

  • contribution to NPS under Section 80CCD(2)- upto 14% of Basic+ DA).

Who Should Opt for Which ?

  • If you are paying rent and receiving HRA, the Old Regime allows you to claim exemptions on HRA.This exemption can lead to substantial tax savings, especially for those living in high-rent cities.
  • If you have a significant home loan with high interest payments, the Old Regime allows you to claim deductions

  • under Section 24(b).

  • Beneficial for individuals who have fewer investments and expenses.

  • Suitable for those who prefer a simplified tax structure without the need for documentation and compliance related to deductions and exemptions.

Compliance and Documentation

  • Requires proper documentation and proof of investments/expenses.
  • Higher compliance due to multiple
  • deductions and exemptions. Lesser compliance and documentation required.
  • Simplified tax filing process.

Tax Planning

  • Suitable for detailed tax planning with multiple investments.
  • Beneficial for long-term financial planning.
  • Suitable for straightforward tax planning.
  • Focus on immediate tax savings without long-term commitments.

Consult with a tax advisor to choose the best regime based on your financial situation. https://bcshettyco.com

Disclaimer:

“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation.”

Author:
Neha

Prepared On:
17/10/23



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