The era of dual tax regimes continues for another year in India. Union Budget happened in January 2024, and the traditional method of deductions and exemptions co-exist for those two regimes with no obligations.
But the choice you make for computation influences the amount of income tax deducted for FY 2024-25 and the pay cheques you see. And above you the most money.
| Income Slab | Old Regime (with deductions) | New Regime (without deductions) |
|---|---|---|
| Up to ₹3 lakh | Nil | Nil |
| ₹3 lakh – ₹6 lakh | 5% | 5% |
| ₹6 lakh – ₹9 lakh | 20% | 10% |
| ₹9 lakh – ₹12 lakh | 20% | 15% |
| ₹12 lakh – ₹15 lakh | 30% | 20% |
| Above ₹15 lakh | 30% | 30% |
Still confused over your exact tax implications? Here's a simple high-level view and exactly why which one works better for you.
Annual Salary:
- Total: ₹12,00,000
- Total investments under all eligible sections: ₹2,50,000
| Aspect | Old Regime | New Regime |
|---|---|---|
| Tax Payable (after rebate) | ₹84,500 | ₹65,000 |
| Effective Tax Saving | If eligible for more savings: MORE | ₹19,500 |
Note: If eligible for deduction deductions more than ₹2.5L—the old regime would become more beneficial.
There's no one-size-fits-all answer. Choosing the right tax regime depends on your income structure and deduction potential. Factors that weaken before selecting:
FAQ