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The single biggest tax decision every year. Wrong selection costs ₹20,000-80,000 annually for most salaried individuals.
Income Tax: ITR filing + TDS · ITR Filing
Old vs New Tax Regime: Selection
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Provisions
Sec 202 (old 115BAC); CBDT Circular 4/2023; Form 10-IEA; Sec 156 (old 87A)
Analysis
New regime rates (AY 2025-26): ₹0-4L: NIL | ₹4-8L: 5% | ₹8-12L: 10% | ₹12-16L: 15% | ₹16-20L: 20% | ₹20-24L: 25% | Above ₹24L: 30%. New regime, what's allowed: Standard deduction ₹75,000 (salaried), employer NPS Sec 124, Income-tax Act 2025 (old Sec 80CCD(2); 14% basic), gratuity exemption, EPF, HRA (not deduction but exemption), Section 157 (old Sec 89) arrears. Old regime, additional deductions: Sec 123 (old Sec 80C; ₹1.5L), Sec 126 (old Sec 80D; ₹25-50K), 80CCD(1B) NPS (₹50K), home loan interest Sec 22(1)(b) (old Sec 24(b); ₹2L), HRA, LTA, all 80-series deductions. When old regime wins: Home loan (claiming ₹2L+ interest), NPS 80CCD(1B) ₹50K, total Sec 123 (old Sec 80C) investments above ₹1.5L, HRA in metro cities, Sec 80D (now Sec 126) for family health insurance. Default from AY 2024-25: New regime is default. Must DECLARE to employer (Form 12BB, now Form 124) if you want old regime TDS. Can still switch at ITR filing time. Sec 202 (old Sec 115BAC): New tax regime, reduced rates, most deductions not available. Optional for individuals and HUFs.
Close
- List all deductions you actually claim (not just theoretically possible)
- Compute tax under old regime: Total income − all deductions → apply old slabs
- Compute tax under new regime: Total income − ₹75K standard deduction → apply new slabs
- Compare FINAL tax payable (after Sec 156 (old Sec 87A) rebate, cess) under both
- Select regime that gives lower total tax outgo
- If you have business income: File Form 10-IEA to opt old regime (once filed, stays for years unless business ceases)
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