{"id":195,"date":"2025-06-16T15:31:07","date_gmt":"2025-06-16T15:31:07","guid":{"rendered":"https:\/\/www.cashweta.co.in\/blog\/?p=195"},"modified":"2025-06-16T15:31:08","modified_gmt":"2025-06-16T15:31:08","slug":"new-vs-old-tax-regime","status":"publish","type":"post","link":"https:\/\/www.cashweta.co.in\/blog\/new-vs-old-tax-regime\/","title":{"rendered":"New Tax Regime vs. Old Tax Regime: Which One Should You Choose?"},"content":{"rendered":"\n

Choosing the right tax regime is crucial for optimising your income tax outflow. With the introduction of the new tax regime under Section 115BAC of the Income Tax Act, taxpayers now have two options for computing their tax liability. Each regime has its pros and cons, depending on income level, deductions, and financial goals. As a seasoned Chartered Accountant in Mumbai, I aim to clarify the nuances of both regimes to help you make an informed choice.<\/p>\n\n\n\n

Overview: What Are the Old and New Tax Regimes?<\/h3>\n\n\n\n

Old Tax Regime:<\/strong> This structure allows you to claim various deductions and exemptions such as HRA, LTA, standard deduction, interest on housing loan, and deductions under Sections 80C to 80U.<\/p>\n\n\n\n

New Tax Regime:<\/strong> Introduced in Budget 2020, this regime offers lower tax rates but removes over 70 deductions and exemptions.<\/p>\n\n\n\n

Income Tax Slabs Comparison (FY 2024-25)<\/h3>\n\n\n\n
Income Slab<\/th>Old Regime Tax Rate<\/th>New Regime Tax Rate<\/th><\/tr>
Up to Rs. 2.5 lakh<\/td>Nil<\/td>Nil<\/td><\/tr>
Rs. 2.5 lakh – Rs. 5 lakh<\/td>5%<\/td>5%<\/td><\/tr>
Rs. 5 lakh – Rs. 7.5 lakh<\/td>20%<\/td>10%<\/td><\/tr>
Rs. 7.5 lakh – Rs. 10 lakh<\/td>20%<\/td>15%<\/td><\/tr>
Rs. 10 lakh – Rs. 12.5 lakh<\/td>30%<\/td>20%<\/td><\/tr>
Rs. 12.5 lakh – Rs. 15 lakh<\/td>30%<\/td>25%<\/td><\/tr>
Above Rs. 15 lakh<\/td>30%<\/td>30%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The new regime provides significantly lower rates for middle-income slabs but doesn\u2019t permit deductions.<\/p>\n\n\n\n

Which Deductions Are Available?<\/h3>\n\n\n\n

Under the old tax regime<\/strong>, you can claim:<\/p>\n\n\n\n