Income Tax Calculator

Old Tax Regime vs New Tax Regime

The Old Tax Regime allows you to claim deductions like 80C (up to ₹1.5 lakh), HRA, and home loan interest, but has higher tax slab rates. The New Tax Regime offers lower tax rates across most income levels but does not allow most deductions, except a standard deduction. Depending on how many deductions you claim, one regime can save you significantly more tax than the other.

Income Tax Slabs Under New Regime (FY 2024-25)

Under the New Regime: income up to ₹3 lakh is tax-free, ₹3-7 lakh is taxed at 5%, ₹7-10 lakh at 10%, ₹10-12 lakh at 15%, ₹12-15 lakh at 20%, and above ₹15 lakh at 30%. A rebate under Section 87A makes income up to ₹7 lakh effectively tax-free.

Income Tax Slabs Under Old Regime

Under the Old Regime: income up to ₹2.5 lakh is tax-free, ₹2.5-5 lakh is taxed at 5%, ₹5-10 lakh at 20%, and above ₹10 lakh at 30%. A rebate under Section 87A makes income up to ₹5 lakh effectively tax-free, and senior citizens get higher exemption limits.

Frequently Asked Questions

Which tax regime is better for salaried employees?

It depends on your deductions. Salaried employees with high HRA, 80C investments, or home loan interest often benefit more from the Old Regime, while those with minimal deductions usually save more under the New Regime.

What is the standard deduction in the New Regime?

The New Tax Regime offers a standard deduction of ₹75,000 for salaried individuals for FY 2024-25.

Is the New Tax Regime mandatory?

No, taxpayers can choose between the Old and New Regime each year (with some restrictions for those with business income), and the New Regime is the default option unless you opt for the Old Regime.