ITR Filing 2024-25: Old Tax Regime Vs New Tax Regime:

ITR Filing 2024-25: Old Tax Regime Vs New Tax Regime If you are a salaried employee, calculating your taxable income and selecting the right tax regime is very important while filing your Income Tax Return. This can have a major impact on your tax liability. Let us understand which regime can be beneficial based on the comparison between the old tax regime and the new tax regime. But first, it is important to understand how your taxable salary is calculated.

Also Read

CA Exposes 87A Rebate Blunder: Denied Before Law Takes Effect

How to Calculate Taxable Salary

Before filing your income tax return, it is essential to know how to calculate taxable salary. The salary income must be calculated as follows:

Particulars	Amount
Basic Salary	Rs XXX
Add: Allowances	Rs XXX
Add: Perquisites	Rs XXX
Add: Profit in Lieu of Salary	Rs XXX
Add: Retirement Benefits	Rs XXX
Add: Pension	Rs XXX
Less: Deductions
a) Entertainment Allowance (if govt employee)	(Rs XXX)
b) Employment/Professional Tax	(Rs XXX)
c) Standard Deduction	(Rs XXX)
Taxable Salary Income	Rs XXX

Income Tax Rate Under Old Tax Regime

Taxpayers are required to pay income tax according to a slab system. This means the more you earn, the higher the percentage of tax you have to pay. Under the old tax regime, the slab rates are divided into three categories:

• Indian Residents aged less than 60 years
• Senior citizens aged between 60 to 80 years
• Super senior citizens aged more than 80 years

Total Income	Tax Rate
	Normal resident	Senior Citizen	Super Senior Citizen
Up to Rs 2.5 lakh	Nil	Nil	Nil
Rs 2.5 lakh to Rs 3 lakh	5%	Nil	Nil
Rs 3 lakh to Rs 5 lakh	5%	5%	Nil
Rs 5 lakh to Rs 10 lakh	20%	20%	20%
Above Rs 10 lakh	30%	30%	30%

Income Tax Rate Under New Tax Regime

The tax rates in the new tax regime are the same for all categories of individuals.

Total Income (Rs)	Rate
Upto 3,00,000	Nil
From 3,00,001 to 7,00,000	5%
From 7,00,001 to 10,00,000	10%
From 10,00,001 to 12,00,000	15%
From 12,00,001 to 15,00,000	20%
Above 15,00,000	30%

Section 87A Rebate: New Regime vs Old Regime

The rebate under Section 87A provides tax relief to resident individuals whose income falls under lower income brackets.

• Section 87A Rebate Under Old Regime: Rebate of up to Rs 12,500 for income up to Rs 5,00,000.
• Section 87A Rebate Under New Regime: Rebate of Up to Rs 25,000 for income up to Rs 7,00,000

Also Read

Filing ITR? Know these key Income Tax Forms to File with Your Return

If your income is above Rs 7,00,000 and the tax is more than the extra income you earned, you get a rebate, so you do not pay more tax than the extra amount you earned.

Rate of Surcharge

When the income exceeds a certain limit, additional tax is charged over and above the existing tax rates. This additional charge is known as a Surcharge. Here are the rates of Surcharge for different income limits:

Nature of Income	Up to Rs 50 lakhs	More than Rs 50 lakhs but up to Rs 1 crore	More than Rs 1 crore but up to Rs 2 crores	More than Rs 2 crores but up to Rs 5 crores	More than Rs 5 crores
Short-term capital gain covered under Section 111A or Section 115AD	Nil	10%	15%	15%	15%
Long-term capital gain covered under Section 112A or Section 115AD or Section 112	Nil	10%	15%	15%	15%
Dividend income (not charged under sections 115A, 115AB, 115AC, 115ACA)	Nil	10%	15%	15%	15%
Unexplained income under Section 115BBE	25%	25%	25%	25%	25%
Any other income (if opted for old tax regime)	Nil	10%	15%	25%	37%
Any other income (if opted for new tax regime under Section 115BAC)	Nil	10%	15%	25%	25%

 

Health and Education Cess

Every taxpayer is required to pay health and education cess at the rate of 4% on the amount of income tax plus surcharge.

Exemptions and Deductions Under Old Tax Regime and New Tax Regime

Here are the Exemptions and Deductions Under the Old Tax Regime and the New Tax Regime

Year	FY 2025-26	FY 2024-25	FY 2024-25
Particulars	New Tax Regime	New Tax Regime	Old Tax Regime
Rebate	1200000	700000	500000
Rebate on STCG 111A	Not Available	Not Available	Available
Rebate on LTCG 112A	Not Available	Not Available	Not Available
Standard Deduction	75000	75000	50000
House Rent Allowance (HRA)	Not Available	Not Available	Available
Leave Travel Allowance (LTA)	Not Available	Not Available	Available
30% Additional Employee Cost (Section 80 JJAA)	Available	Available	Available
Food Allowance	Not Available	Not Available	Available
Professional Tax	Not Available	Not Available	Available
Reimbursement of Office Expense	Available	Available	Available
Home Loan Interest (Rent)	Available	Available	Available
Home Loan Interest (Self Occupied)	Not Available	Not Available	Available
LIC/ PF/ PPF (Section 80C)	Not Available	Not Available	Available
NPS Employee Contribution	Not Available	Not Available	Available
NPS Employer Contribution	Available (14% for all)	Available (14% for all)	Available (12% Non-Govt and 14% Govt)
Mediclaim (Section 80D)	Not Available	Not Available	Available
Disabled Individual (Section 80U)	Not Available	Not Available	Available
Education Loan (Section 80E)	Not Available	Not Available	Available
EV Loan (Section 80EEB)	Not Available	Not Available	Available
Political/Trust Donation (Section 80G/ 80GGC)	Not Available	Not Available	Available
Savings Bank Interest (Section 80TTA/ 80TTB)	Not Available	Not Available	Available
Family Pension Deduction	25000	25000	15000
VRS Exemption (Section 10(10C))	Available	Available	Available
Gratuity Exemption (Section 10(10))	Available	Available	Available
Leave Encashment (Section 10(10AA))	Available	Available	Available
Transport for specially-abled	Available	Available	Available

What Tax Regime is Beneficial?

Your choice between the old and new tax regime depends on the deductions you can claim.

• If you do not have any deductions, the new regime is usually better.
• If you claim deductions like 80C or 80D or home loan interest, the old regime may save you more tax.