Dec 17, 2025
Since the New Tax Regime (Section 115BAC) was introduced, taxpayers have been divided — should they stick to the old system with deductions or move to the lower-tax new system?
This blog compares both regimes in-depth so you can make an informed choice this financial year.
Tax Slabs Comparison (FY 2024–25)
Income Range | Old Regime | New Regime |
|---|---|---|
Up to ₹2.5 lakh | Nil | Nil |
₹2.5–5 lakh | 5% | 5% |
₹5–7.5 lakh | 20% | 10% |
₹7.5–10 lakh | 20% | 15% |
₹10–12.5 lakh | 30% | 20% |
₹12.5–15 lakh | 30% | 25% |
Above ₹15 lakh | 30% | 30% |
Key Difference
Feature | Old Regime | New Regime |
|---|---|---|
Deductions allowed? | Yes (80C, 80D, etc.) | No |
Standard deduction | ₹50,000 | ₹50,000 |
Rebate u/s 87A | Up to ₹5 lakh | Up to ₹7 lakh |
Default regime | No | Yes |
When to Choose the Old Regime
✅ You claim large deductions (like 80C, 80D, HRA).
✅ You have home loan interest or ELSS investments.
✅ You contribute to NPS or pay high insurance premiums.
When to Choose the New Regime
✅ You have fewer deductions.
✅ You prefer a simpler structure.
✅ Your income is between ₹7–9 lakh — effective tax = zero (after rebate).
Pro Tip:
You can switch between regimes every year (for salaried taxpayers). Business owners, however, can switch only once.
Conclusion
There’s no one-size-fits-all answer — calculate tax under both regimes before filing.
If you have active investments, the old regime usually benefits you. If not, the new regime offers simplicity.
Continue reading:
→ Complete Guide to Filing Income Tax Returns (ITR) for FY 2024–25
→ Top Deductions Under Section 80C to 80U You Shouldn’t Miss
→ Common Income Tax Filing Mistakes & How to Avoid Them
Please note: The content of this blog is provided for general informational purposes only and does not constitute legal, financial, or professional advice. While every effort has been made to ensure the accuracy and reliability of the information presented, Unpaper makes no representations or warranties, express or implied, regarding the completeness, accuracy, suitability, or availability of the content for any purpose.
Unpaper shall not be held liable for any errors, omissions, or inaccuracies in the content, nor for any losses, damages, or consequences arising from the use of or reliance on the information provided. Readers are encouraged to seek independent legal or professional advice before making decisions based on the material contained herein.
The content may include references to laws, rules, or regulations subject to change, and Unpaper does not guarantee the currency or continued accuracy of such information. Use of this blog and any reliance on its content is at the reader's own risk.