📌 Introduction
Choosing between the New Tax Regime and the Old Tax Regime is a vital decision for taxpayers in FY 2024–25. The July 2024 Budget made the New Regime more attractive by:
- Expanding tax slabs
- Raising standard deduction to ₹75,000
- Boosting tax rebate
- Increasing basic exemption limits
In this guide, we compare both regimes post-budget updates to help you pick the best option.
🧾 New Tax Regime – Updated Slabs & Benefits (FY 2024-25)
🔄 Updated Income Slabs (Budget July 2024)
| Income (₹) | Tax Rate |
|---|---|
| Up to 3,00,000 | 0% |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
✨ Key Updates:
- Standard Deduction increased from ₹50,000 to ₹75,000
- Basic exemption limit raised from ₹3 lakh to ₹4 lakh (effective FY 2025–26)
- Tax rebate under Section 87A extended up to ₹7 lakh income.
🧾 Old Tax Regime – Deductions & Slabs (FY 2024-25)
| Income (₹) | Tax Rate |
|---|---|
| Up to 2,50,000 | 0% |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
✅ Key Features:
- Avail Standard Deduction ₹50,000
-
Claim deductions like:
- Section 80C (₹1.5 lakh)
- 80D, 80G, 80CCD, HRA, Home loan interest, etc.
- Rebate under Section 87A for incomes up to ₹5 lakh
🔍 Comparison: New vs Old (Slabs & Deductions)
| Feature | New Regime | Old Regime |
|---|---|---|
| Standard Deduction | ₹75,000 | ₹50,000 |
| Tax Slabs | Expanded, lower rates for ₹3–15 lakh | Higher slab rates |
| Rebate Limit (Section 87A) | ₹7 lakh | ₹5 lakh |
| Deductions Allowed | Only standard + select ones | Wide deductions (80C, 80D etc.) |
| Complexity | Simple (fewer claims) | Complex (many proofs needed) |
| Default option (FY 2025–26) | New Regime | N/A |
📊 Example Comparison: ₹10 Lakh Salary, FY 2024–25
👤 New Regime Scenario
- Gross Income: ₹10,00,000
- Standard Deduction: ₹75,000
- Taxable: ₹9,25,000
- Tax Liability: ~₹42,500 + cess
👤 Old Regime Scenario
- Gross Income: ₹10,00,000
- Standard Deduction: ₹50,000
- 80C Deductions: ₹1,00,000
- Total Deductions: ₹1,50,000
- Taxable: ₹8,50,000
- Tax Liability: ~₹82,500 + cess
👉 New Regime wins here with lower tax (~₹40,000 saved)
🧭 Which Regime Should You Choose?
Choose New Regime if you:
- Prefer simplicity with fewer deductions
- Have minimal investments or home loan interest
- Want maximum standard deduction and slab relief
Choose Old Regime if you:
- Claim 80C (PF/PPF), 80D, HRA, and other deductions
- Have significant investments or home loan benefits
- Benefit more from exemptions than slab savings
✅ Key Takeaways (Budget 2024–25 Updates)
-
🟢 New Regime became more appealing due to:
✔️ Standard deduction jump to ₹75,000
✔️ Slab adjustments
✔️ Increased rebate thresholds - 🔁 Old Regime still favorable for those with multiple deductions
🛠️ Decision-Making Tips
- Calculate tax under both regimes
- Use online tax calculator integrating updated slabs & deductions
- Consult a CA if your situation includes investments, loans, or business income
📞 Need Help Choosing or Filing?
Kumar Ravi & Company can help!
- Personalized tax assessment
- Help with Form 10-IEA for old regime opt-in
- Efficient ITR filing & compliance
📩 Email: ravikumarshah542@gmail.com
📞 Call/WhatsApp: +91-7004361367