Comparison Between Old & New Tax Regime: Check Which One is Better for You?:

Comparison Between Old & New Tax Regimes: Check Which One is Better for You.

Taxpayers are offered two options to file their income tax return (ITR), i.e., the old tax regime and the new tax regime. Taxpayers are required to choose one of them. Both regimes have their own benefits and disadvantages. If you are eligible to file taxes, then you must have a question in mind about which regime to select. In accordance with the Income Tax Department, this time salaried taxpayers have the chance to move to the old tax regime if they have opted for the new tax regime from one financial year to another. In addition to this, they can also move to a new tax regime if they have opted for the old tax regime.

Old Tax Regime

Taxpayers who opted for the old tax regime are awarded the advantages of section 80C, in addition to leave travel allowance and rent allowance. Through investing in numerous tax savings, you can enjoy the advantages of Section 80C. This section allows you to reduce your taxable income by up to Rs. 1.5 lakh, helping you pay less tax overall. The old tax regime can be considered a better option for taxpayers who have invested in any of the mentioned schemes, in which you are awarded with Section 80C advantages or any allowance helps you lower the tax.

New Tax Regime

In the 2025 Budget, it was announced that people earning up to Rs. 12 lakh won’t pay any income tax. These new rates will apply starting April 1, 2025. However, if you're filing taxes for 2024-25, the rates from the 2024 Budget apply as per the above given image. Also people earning up to Rs. 7 lakh won’t pay any income tax in New Tax Regime in FY 2024-25.

Decision to Regime Will be Easier by Calculating Tax

The decision of choosing between old and new tax regimes can be made easier by calculating the tax. You are not required to calculate by yourself; calculations can be done at the official website of the Income Tax Department.