What Changed in FY 2024-25?
From FY 2024-25 (Assessment Year 2025-26), the new tax regime is the default— taxpayers must explicitly opt for the old regime. Budget 2024 enhanced the new regime with a higher standard deduction of ₹75,000 (up from ₹50,000) and revised slabs. The rebate under Section 87A means individuals with taxable income up to ₹7 lakh pay zero tax under the new regime.
New Tax Regime — Slabs and Rates (FY 2024-25)
Standard deduction: ₹75,000 (automatic, no declaration needed)
| Taxable Income (after ₹75K deduction) | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
* 87A rebate: zero tax if taxable income (after ₹75K deduction) ≤ ₹7 lakh. Add 4% health & education cess on computed tax.
Old Tax Regime — Slabs and Rates (FY 2024-25)
Allows deductions: 80C (₹1.5L), 80D (₹25K–₹50K), HRA, standard deduction ₹50K, etc.
| Taxable Income (after all deductions) | Tax Rate (Below 60) |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
* 87A rebate: zero tax if taxable income ≤ ₹5 lakh (old regime). Senior citizens (60–80): exemption up to ₹3L. Super senior (80+): up to ₹5L.
New Regime vs Old Regime — Side by Side Comparison
| Feature | New Regime | Old Regime |
|---|---|---|
| Standard deduction | ₹75,000 | ₹50,000 |
| Section 80C (LIC, ELSS, PPF) | Not allowed | Up to ₹1,50,000 |
| Section 80D (health insurance) | Not allowed | Up to ₹25,000–₹50,000 |
| HRA exemption | Not allowed | Allowed (10(13A)) |
| Home loan interest (Sec 24) | Not allowed | Up to ₹2,00,000 |
| NPS (80CCD(1B)) | Not allowed | Up to ₹50,000 |
| Default from FY 2024-25 | Yes | Must opt in |
| 87A rebate limit | ₹7,00,000 | ₹5,00,000 |
When is Old Regime Better?
Old regime saves more tax if your total eligible deductions are significant. Rule of thumb:
- ₹6L–₹10L income: Old regime wins if deductions exceed ~₹2L–₹2.5L
- ₹10L–₹15L income: Old regime wins if deductions exceed ~₹3L–₹3.5L
- Above ₹15L income: Old regime wins if deductions exceed ~₹4L+
- High HRA (metro city renter with basic > ₹50K/month) strongly favours old regime
- Home loan with ₹2L interest + 80C of ₹1.5L + 80D of ₹25K = ₹3.75L total deduction — old regime likely wins
When is New Regime Better?
- Your deductions are less than ₹2L–₹3L per year (common for young earners, first jobs)
- You don't pay rent or have a home loan
- Income ≤ ₹7L → effectively zero tax after ₹75K standard deduction and 87A rebate
- You prefer simplicity — no need to track investments or save receipts
- You are self-employed or a freelancer without access to HRA or employer NPS
Examples for Different Income Levels
| Gross Income | New Regime Tax | Old Regime Tax* | Better Option |
|---|---|---|---|
| ₹6,00,000 | ₹0 (87A rebate) | ₹23,400 | New Regime |
| ₹10,00,000 | ₹44,200 | ₹62,400* | New Regime |
| ₹10,00,000 | ₹44,200 | ₹14,560** | Old Regime |
| ₹15,00,000 | ₹1,04,000 | ₹1,56,000* | New Regime |
| ₹15,00,000 | ₹1,04,000 | ₹62,400*** | Old Regime |
* No deductions (only ₹50K standard). ** With max deductions: 80C ₹1.5L + 80D ₹25K + HRA ₹1.5L + NPS ₹50K = ₹3.75L. *** With full deductions at ₹15L. All figures include 4% cess. Use our calculator for your exact numbers.
Calculate Your Tax Now
Numbers above are illustrative. Your actual tax depends on your specific deductions, HRA city, age group, and other factors. Use our free Income Tax Calculator to enter your exact details and instantly see which regime saves you more — with a complete slab-wise breakdown and take-home salary comparison.