Tax planning tips
- Under the new regime, the standard deduction was increased to ₹75,000 for salaried employees from FY 2024–25 — factor this in when comparing regimes.
- If you have significant deductions (80C, HRA, home loan interest) totalling more than ₹3–4L, the old regime is often more beneficial.
- If your income is up to ₹7L under the new regime, Section 87A rebate eliminates your tax liability entirely — making the new regime very attractive for this bracket.
- Invest in instruments like PPF, ELSS, NPS, and tax-saving FDs under Section 80C to reduce taxable income under the old regime.
New vs old tax regime — which is right for you?
India's dual tax regime system (introduced in FY 2020-21 and made default from FY 2023-24) gives taxpayers a choice each year. The new regime offers lower slab rates and a simplified structure but eliminates most deductions and exemptions. The old regime retains deductions like 80C (investments), 80D (health insurance), HRA, and home loan interest, making it beneficial for those with substantial deductions.
For most salaried individuals earning up to ₹12–13 lakh with moderate deductions, the new regime now results in equal or lower tax. The breakeven point — where both regimes produce the same tax — depends heavily on your mix of deductions. Use this calculator with both options to find your optimal choice before filing.
Frequently asked questions
New vs old regime — which is better?
What is the Section 87A rebate?
When is the income tax filing deadline?
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