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The old tax regime refers to the system of income tax calculation and slabs that existed before the introduction of the new tax regime. In case of "non-business cases ", option to choose the regime can be exercised every year directly in the ITR to be filed on or before the due date specified under section 139(1).

The new tax regime is a simplified tax structure introduced in Budget 2020, under which taxpayers can pay lower taxes but have to forego maximum deductions and exemptions. The new tax regime has lower tax rates than the old regime but eliminates the tax benefits of various investments and expenses.

Old Tax Regime. New Tax Regime (Budget 2025) Basic Exemption Threshold ₹2.5 lakh ₹12 lakh (₹12.75 lakh for salaried) Tax Slabs. 5%, 20%, 30% beyond their thresholds. ... Low (fewer claims mean simpler filing) Ideal For. Taxpayers with large deductions & exemptions (≥ ₹5–8 lakh)

When total deductions exceed 3.75 lakhs, the old regime will be beneficial. When total deductions range from 1.5 lakhs to 3.75 lakhs: this is determined by your income level. Summing Up Old Tax Regime Vs New Tax Regime. People often wonder about the difference between old and new tax regime.

The old regime allows you to reduce your taxable income by claiming various deductions and exemptions, like those for insurance premiums, home loan interest, house rent or travel allowance. The new regime, introduced under Section 115BAC, offers lower tax rates but no other benefits besides a few deductions.

As on 3rd Mar 2022, govt. is mulling to sunset the Old Tax Regime to strengthen the new tax regime and to reduce the compliance burden on taxpayers to plan and manage. As on 1st Feb 2023, part of Budget 2023, govt. has given clear direction to eventually sunset the old tax regime and has made "new tax regime" a default when filing taxes in India. ...

When comparing the new tax regime vs the old tax regime, remember that both regimes have different benefits based on an individual’s financial habits. What to Consider When Choosing Between New and Old Tax Regimes. When choosing between the new vs old tax regime, several factors should guide your decision: 1. Income Level

The Finance Act 2023 has made the new tax regime under Section 115BAC the default tax regime for individuals, HUFs, AOPs (excluding co-operative societies), BOIs, and Artificial Juridical Persons from AY 2024-25 onwards. However, taxpayers still have the option to opt out and choose the old tax regime.

Note: From A.Y. 2024-25, the default tax regime will be the new tax regime of section 115BAC, and a taxpayer needs to explicitly opt out of the new tax regime and choose to be taxed under the old tax regime. Further, there is no penalty for changing regimes (in the case of business income, it can be done only once).

In India currently, there are two types of tax regimes, i.e., Old Regime and New Regime. Old Tax Regime – Before 2020, India had just one tax system. Under the Old tax system, you could deduct a variety of expenses from your income, such as house rent, travel expenses, medical expenses, tuition fees for children, etc.

Understanding the Old Tax Regime. The old tax regime allows taxpayers to enjoy several exemptions and deductions aimed at reducing their taxable income. It exempts income up to Rs.2.5 Lakh, while the maximum rate applies on income above Rs.15 Lakh at 30%. Tax Rates Under the Old Tax Regime . The old tax slabs remain unchanged for FY 2025-26 as ...

The old regime still remains a wise selection for taxpayers who prioritise tax planning and prefer to maximise available allowances. Moneycontrol World Desk first published: May 3, 2025 04:43 pm

1] Opt for the New Regime If You: Don’t have many deductions to claim. Don’t pay rent or housing loan EMIs. Prefer a simplified tax process. Invest in equities, mutual funds, or other instruments not tied to tax-saving benefits. 2] Stick with the Old Regime If You: Have a home loan, pay rent, or invest regularly in PPF, ELSS, etc.

Old Tax Regime vs New Tax Regime: Which One Should You Choose? The changes announced for FY24 make the new tax regime a compelling option for two sets of people. It is an obvious choice for those with income below ₹ 7 lakh (or ₹ 7.5 lakh for those with salary income as they avail an additional ₹ 50,000 as Standard Deduction).

The standard deduction of Rs. 75,000, which was previously accessible under the old tax regime, has been extended to the new tax regime. Family pension The families that receive a pension are eligible to get a tax deduction of Rs. 15,000 or 1/3rd of the pension, whichever is lower.

The Union Budget 2025-26 has kept the tax slab rates unchanged for salaried individuals below 60 years old. The existing tax slab rates are as follows: nil for individuals earning up to INR 2.5 ...

Old Tax Regime Vs. New Tax Regime which one to choose for Financial Year 2025-26 i.e. Assessment Year 2026-27? Summary: The decision between the old and new tax regimes for the Assessment Year 2026-27 largely depends on an individual’s income structure and eligibility for various exemptions and deductions. The old tax regime allows a wide range of deductions, such as standard deductions, HRA ...

Old Vs. New Tax Regime: Should I choose old tax regime or new? Under the new tax regime, tax rates have been rationalised into five tax slabs ranging from 0% to 30%. The total tax you pay after or without deductions from your annual income, health insurance, etc., also differs based on your source of income.

The new tax regime was introduced in the Union Budget of 2020 and became effective from the financial year 2020-21. Under the new tax regime, taxpayers are offered lower tax rates but are not allowed to claim certain exemptions and deductions available under the Income Tax Act. Taxpayers can choose to opt for either the old tax regime or the ...