Choosing Old or New Tax Regime for FY 25-26: Time to declare to employer | Choose wisely for Lower TDS:

Choosing Old or New Tax Regime for FY 25-26: Time to declare to employer | Choose wisely for Lower TDS This is the time when employees are required to declare to employees whether to use the Old or New Tax Regime for TDS Deduction for Financial Year 2025-26 (Assessment Year 2026-27). Salaried employee is required to make decision wisely as Choosing wrong tax regime may result in High TDS and Less Take Home Salary. Income Tax Slabs in New Tax Regime for Financial Year 2025-26 (Assessment Year 2026-27):

Income Slabs	Tax Rates
0-4L	0%
4-8L	5%
8-12L	10%
12-16L	15%
16-20L	20%
20-24L	25%
Above 24L	30%

Income Tax Slabs in Old Tax Regime for Financial Year 2025-26 (Assessment Year 2026-27):

0-2.5L	0%
2.5-5L	5%
5-10L	20%
Above 10L	30%

Salaried Taxpayers under New Tax Regime: Salary Income of Rs.12,75,000 will be Tax-Free under the New Tax Regime. Salaried Taxpayers in New Tax Regime enjoy a Standard Deduction of Rs.75,000, Which means the Taxable Salary is Rs.12,00,000. Rebate under Section 87A increased from Rs.25000 to Rs.60,000 under New Tax Regime with annual income up to Rs.12,00,000. Therefore Total Tax will be Zero after the rebate. Brief comparison between New and Old Tax Regime

Particulars	Old Tax Regime	New Tax Regime
		(FY 2025-26)
Income level for rebate eligibility	Rs. 5 lakhs	Rs. 12 lakhs
Standard Deduction	Rs. 50,000	Rs. 75,000
Effective Tax-Free Salary income	Rs. 5.5 lakhs	Rs. 12.75 lakhs
Rebate u/s 87A	Rs.12,500	Rs.60000
HRA Exemption	Yes	No
Leave Travel Allowance (LTA)	Yes	No
Other allowances including food allowance of Rs 50/meal subject to 2 meals a day	Yes	No
Entertainment Allowance and Professional Tax	Yes	No
Perquisites for official purposes	Yes	Yes
Interest on Home Loan u/s 24b on: Self-occupied or vacant property	Yes	No
Interest on Home Loan u/s 24b on: Let-out property	Yes	Yes
Deduction u/s 80C (EPF, LIC, ELSS, PPF, 5 year FD, Children's tuition fee etc)	Yes	No
Employee's (own) contribution to NPS U/s 80CCD(1B)	Yes	No
Employer's contribution to NPS U/s 80CCD(2)	Yes	Yes
Medical insurance premium - 80D	Yes	No
Disabled Individual - 80U	Yes	No
Interest on education loan - 80E	Yes	No
Interest on Electric vehicle loan - 80EEB	Yes	No
Donation to Political party/trust etc - 80G	Yes	No
Savings Bank Interest u/s 80TTA and 80TTB	Yes	No
Other Chapter VI-A deductions	Yes	No
All contributions to Agniveer Corpus Fund - 80CCH	Yes	Yes
Deduction on Family Pension Income	Yes	Yes
Gifts upto Rs 50,000	Yes	Yes
Exemption on voluntary retirement 10(10C)	Yes	Yes
Exemption on gratuity u/s 10(10)	Yes	Yes
Exemption on Leave encashment u/s 10(10AA)	Yes	Yes
Daily Allowance (For Official purpose)	Yes	Yes
Conveyance Allowance (For Official purpose)	Yes	Yes
Transport Allowance for a specially abled person (For Official purpose)	Yes	Yes

When to choose New Tax or when to choose Old Tax Regime? The new tax regime of Income Tax provides you with higher slab benefits, but the Old Tax regime provides you more deductions and exemptions. As per our analysis, For a taxpayer with a Salary income of Rs. 2400000, his deductions should be more than Rs. 800000, to opt for Old Tax Regime. What if I declare the wrong regime and later found, another one more beneficial? The employers don't allow you to change the tax regime once opted. This means once you have opted for a regime, you can only change the same at time of Income Tax Return Filing. Thus it is very important that you make the decision wisely.