New vs Old Tax Regime: Detailed Comparative Analysis for FY 2024-25

Understanding the Paradigm Shift in Indian Income Tax

The Finance Act has solidified the New Tax Regime (Section 115BAC) as the default tax regime for individuals, HUFs, and AOPs. However, taxpayers still retain the option to elect the Old Tax Regime at the time of filing Income Tax Returns.

Key Slab Rate Comparison (FY 2024-25 / AY 2025-26)

Under the New Regime, income up to ₹3,00,000 attracts nil tax, with concessional tiered rates up to ₹15,00,000. Combined with a standard deduction of ₹75,000 for salaried employees and rebate under Section 87A up to taxable income of ₹7,00,000, salaried individuals earning up to ₹7.75 Lakh pay zero income tax.

When is the Old Regime Better?

If you have substantial chapter VI-A deductions including:

• Section 80C (EPF, PPF, ELSS, Life Insurance) up to ₹1,50,000
• Section 80D (Health Insurance) up to ₹75,000 (including senior citizen parents)
• Section 24(b) (Home Loan Interest on self-occupied property) up to ₹2,00,000
• House Rent Allowance (HRA) exemption under Section 10(13A)

The Old Regime can still yield considerable tax savings. Consult N K Panda & Co. for tailored tax computation and optimization.