Question 1

What is the new tax regime for FY 2024-25?

Accepted Answer

The new tax regime for FY 2024-25 offers lower slab rates (5%, 10%, 15%, 20%, 25%, 30%) without most deductions. It includes a ₹75,000 standard deduction (increased from ₹50,000 in Budget 2024) and a ₹7L rebate under 87A.

Question 2

Which regime is better — old or new?

Accepted Answer

It depends on your deductions. If you claim less than ₹2–2.5L in deductions (80C, HRA, home loan interest, etc.), the new regime usually saves more. If you have a home loan + HRA + max 80C, the old regime is often better above ₹10L income.

Question 3

Is the new tax regime now the default?

Accepted Answer

Yes. From FY 2024-25, the new regime is the default for salaried employees. If you want to use the old regime, you must specifically opt for it when filing your ITR or informing your employer.

Question 4

What is Section 87A rebate?

Accepted Answer

Section 87A provides a full tax rebate (tax becomes zero) if your taxable income is up to ₹5L under old regime, or up to ₹7L under new regime. This means income up to ₹7L effectively has zero tax under the new regime.

Question 5

Does the 4% cess apply on top of tax?

Accepted Answer

Yes. Health and Education Cess of 4% is levied on the total income tax calculated. This is mandatory in both old and new regimes and is already included in this calculator's results.

Question 6

What deductions are available in the new regime?

Accepted Answer

Very few: ₹75,000 standard deduction, employer's NPS contribution (80CCD(2)), and gratuity/VRS exemptions. Most popular deductions like 80C (PPF, ELSS, LIC), HRA, home loan interest, and 80D (health insurance) are not available.

Income Slab	Rate
Up to ₹3,00,000	Nil
₹3L – ₹7L	5%
₹7L – ₹10L	10%
₹10L – ₹12L	15%
₹12L – ₹15L	20%
Above ₹15L	30%

Income Slab	Rate
Up to ₹2,50,000	Nil
₹2.5L – ₹5L	5%
₹5L – ₹10L	20%
Above ₹10L	30%

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