For the Financial Year 2024–25, the Income Tax Department allows individuals to choose between two tax regimes:
New Tax Regime (Default) – Simplified, with lower rates but no exemptions
Old Tax Regime – Allows deductions under 80C, HRA, NPS, etc.
In this guide, we provide updated tax slab rates, surcharge details, and clear tax comparisons using maximum allowable deductions so you can choose the most tax-efficient option for your situation.
🔹 Key Highlights for FY 2024–25
✅ New Regime is default; Old Regime needs to be opted-in while filing
✅ Standard Deduction of ₹50,000 allowed in both regimes
🧾 Deductions Considered Under Old Regime (for Comparison)
Section
Amount
Deduction Type
80C
₹1,50,000
LIC, PPF, ELSS, PF, etc.
80CCD(1B)
₹50,000
Additional for NPS Contribution
Standard Deduction
₹50,000
For salaried individuals
80D
₹25,000
Health insurance for self/family
Total
₹2,75,000
📊 Income Tax Calculation Comparison (With ₹2.75L Deductions under Old Regime)
🧮 Case 1: Gross Income ₹9,00,000
Item
Old Regime
New Regime
Deductions
₹2,75,000
❌ Not allowed
Net Taxable Income
₹6,25,000
₹9,00,000
Tax Before Cess
₹26,250
₹45,000
Cess @ 4%
₹1,050
₹1,800
Total Tax
₹27,300
₹46,800
✅ Best Option
✅ Old Regime
🧮 Case 2: Gross Income ₹12,00,000
Item
Old Regime
New Regime
Deductions
₹2,75,000
❌ Not allowed
Net Taxable Income
₹9,25,000
₹12,00,000
Tax Before Cess
₹1,27,500
₹90,000
Cess @ 4%
₹5,100
₹3,600
Total Tax
₹1,32,600
₹93,600
✅ Best Option
✅ New Regime
🧮 Case 3: Gross Income ₹15,00,000
Item
Old Regime
New Regime
Deductions
₹2,75,000
❌ Not allowed
Net Taxable Income
₹12,25,000
₹15,00,000
Tax Before Cess
₹2,02,500
₹1,50,000
Cess @ 4%
₹8,100
₹6,000
Total Tax
₹2,10,600
₹1,56,000
✅ Best Option
✅ New Regime
📋 Summary Comparison Table
Gross Income
Old Regime Tax (with deductions)
New Regime Tax
Better Option
₹7,00,000
₹17,500 – rebate = ₹0
Rebate = ₹0
🎯 Equal
₹9,00,000
₹27,300
₹46,800
✅ Old Regime
₹12,00,000
₹1,32,600
₹93,600
✅ New Regime
₹15,00,000
₹2,10,600
₹1,56,000
✅ New Regime
🧭 Regime Selection Guide
Feature
Old Regime
New Regime
Claim deductions (80C, HRA, etc.)
✅ Yes
❌ No
Standard Deduction
✅ ₹50,000
✅ ₹50,000
Simplicity of tax filing
❌ Complex
✅ Very Simple
Rebate Limit (87A)
₹5L
₹7L
Best for
Investors, HRA, NPS Users
Salaried with fewer deductions
📝 Final Tips
Salaried individuals can switch regimes each year
Business/professionals must file Form 10-IEA to switch
Calculate tax under both regimes before filing
Don’t forget 80CCD(1B) if you contribute to NPS!
🔚 Conclusion
The New Regime is beneficial for those without significant tax-saving investments. But if you claim full deductions (₹2.75L or more) — especially through 80C and NPS — the Old Regime can reduce your tax liability substantially.
💡 Need help choosing the right regime or filing ITR? 📞 Contact our tax experts at financialadviser.co.in for a free consultation and smart tax planning.
