Tax5 min read · FY 2024-25
Old vs New Tax Regime: Which Saves More Tax?
From FY 2024-25, the new tax regime is the default. But is it actually better for you? The answer depends entirely on how many deductions you claim. Here's a clear comparison.
Budget 2024 Key Change
Standard deduction under the new regime increased from ₹50,000 to ₹75,000. This alone saves ₹7,500 in tax for salaried employees in the 30% slab.
Tax Slabs: New vs Old Regime
New Regime (FY 2024-25)
| Income Slab | Rate |
|---|---|
| Up to ₹3L | Nil |
| ₹3L–₹7L | 5% |
| ₹7L–₹10L | 10% |
| ₹10L–₹12L | 15% |
| ₹12L–₹15L | 20% |
| Above ₹15L | 30% |
Old Regime
| Income Slab | Rate |
|---|---|
| Up to ₹2.5L | Nil |
| ₹2.5L–₹5L | 5% |
| ₹5L–₹10L | 20% |
| Above ₹10L | 30% |
4% Health & Education Cess applies on tax in both regimes.
Feature Comparison
| Feature | Old Regime | New Regime |
|---|---|---|
| Standard Deduction | ₹50,000 | ₹75,000 |
| Section 80C (LIC, PPF, ELSS) | Up to ₹1.5L | Not available |
| HRA Exemption | Available | Not available |
| Home Loan Interest (80EEA) | Up to ₹2L | Not available |
| Section 80D (Health Insurance) | Up to ₹50K | Not available |
| Leave Travel Allowance | Exempt | Taxable |
| Tax Slab Rates | 5/20/30% | 5/10/15/20/25/30% |
| Rebate u/s 87A | Up to ₹5L income | Up to ₹7L income |
| Default Regime (FY 2024-25) | Opt-in required | Default |
Tax Examples by Income Level
| Annual Income | Old Regime | New Regime | Winner |
|---|---|---|---|
| ₹6,00,000 | ₹0 | ₹0 | Tie |
| ₹8,00,000 | ₹46,800 (with 80C) | ₹31,200 | New |
| ₹10,00,000 | ₹46,800 | ₹54,600 | Old |
| ₹15,00,000 | ₹1,02,700 | ₹1,17,000 | Old |
| ₹20,00,000 | ₹2,06,000 | ₹2,34,000 | Old |
Old regime examples assume max 80C + HRA deductions claimed. Actual tax depends on your specific deductions.
Our Recommendation
- Choose New Regime if: You claim less than ₹2L in total deductions (80C, HRA, LIC, etc.)
- Choose Old Regime if: You actively invest in 80C instruments, pay HRA, and have a home loan
- Income below ₹7L? New regime gives you ₹0 tax via 87A rebate — go new.