ITR filing FY 2024-25: New versus old income tax regime - what helps you save more tax? Check calculations before filing return
ITR filing FY 2024-25: The choice of the income tax regime while filing Income Tax Return (ITR) is an extremely important one. Your final tax outgo is dependent on the tax regime you opt for, hence the choice between the new and old income tax regime should be an informed decision.
Salaried taxpayers have the option to choose between the new and old income tax regime every year. As your financial journey evolves, and changes are made in both the new and old income tax regime, it's crucial for you to do a final check on which regime suits you best before filing ITR for FY 2024-25.
'The Government has over the years brought significant revisions, in the New Regime, making the choice more compelling—and more consequential—than ever,' says Amarpal Chadha, Tax Partner, EY India.
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If you are confused about the new versus old income tax regime and are still wondering which works out better for you, we have you covered.
Income Tax Slabs FY 2024-25
: New vs Old Tax Regime
Before understanding the math to decide between the new and old regimes, here's a look at the tax slabs in the respective regimes.
Income Tax Slabs FY 2024-25 - Old Tax Regime
Income tax slabs (Rs)
Income tax rates (%)
From 0 to 2,50,000
0
From 2,50,001 to 5,00,000
5
From 5,00,001 to 10,00,000
20
From 10,00,001 and above
30
The above tax slabs are applicable for resident individuals up to the age of 60 years. For senior citizens between the age of 60-80 years, the basic exemption limit is Rs 3 lakh.
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For super senior citizens the basic exemption limit is Rs 5 lakh.
Income Tax Slabs FY 2024-25 - New Tax Regime
Income tax slabs (Rs)
Income tax rate (%)
From 0 to 3,00,000
0
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
From 15,00,001 and above
30
The tax slabs under the new regime are very different from those in the old regime, with new tax brackets and lower tax rates. However, there is no separate basic exemption limit for senior and super senior citizens.
New vs Old Income Tax Regime: Which one should you choose for ITR filing?
The table below by EY, gives a side-by-side comparison of the new and old Tax regimes, highlighting key differences in structure, eligibility, and suitability to help taxpayers make an informed choice.
Criteria
New Tax Regime
Old Tax Regime
Objective
Simplify tax compliance and reduced documentation
Encourages tax-saving through planned investments
Tax Slab Rates
Lower slab rates with limited deductions/exemptions
Higher slab rates with various deductions/exemptions
Standard Deduction
Rs 75,000
Rs 50,000
Section 80C and D (Investments)
Not applicable
Allowed (up to ₹1.5 lakh) – includes PPF, ELSS, LIC, etc. and deduction for self and family medical insurance premium
HRA (House Rent Allowance)
Not applicable
Available, subject to conditions
NPS (Employer contribution)
Up to 14% of Basic Salary+ Dearness Allowance
Up to 10% of Basic salary+ Dearness Allowance
To illustrate how tax liabilities vary under each regime (for the Financial Yeat 2024-25), here's a comparative snapshot across income levels for a Resident individual:
Particulars
Income 7.5 lakhs
Income 18 lakhs
Income 25 lakhs
Income 75 lakhs
New
Old
New
Old
New
Old
New
Old
Gross Income
7,50,000
7,50,000
18,00,000
18,00,000
25,00,000
25,00,000
75,00,000
75,00,000
Less: Standard Deduction
-75,000
-50,000
-75,000
-50,000
-75,000
-50,000
-75,000
-50,000
Less: HRA Exemption*
-
-82,500
-
-1,50,000
-
-1,75,000
-
-2,25,000
Less: Chapter VIA Deduction
-
-
-
-
-
-
-
-
80C
-
-1,00,000
-
-1,50,000
-
-1,50,000
-
-1,50,000
80CCD (1B)
-
-
-
-50,000
-
-50,000
-
-50,000
80CCD2
-
-
-1,26,000
-90,000
-1,75,000
-1,25,000
-5,25,000
-3,75,000
80D
-
-
-
-25,000
-
-25,000
-
-25,000
Taxable Income
6,75,000
5,17,500
15,99,000
12,85,000
22,50,000
19,25,000
69,00,000
66,25,000
Tax
-
16,000
1,69,700
1,98,000
3,65,000
3,90,000
17,60,000
18,00,000
Surcharge
-
-
-
-
-
-
1,76,000
1,80,000
Cess @ 4%
-
640
6,788
7,920
14,600
15,600
77,440
79,200
Total Tax
-
16,640
1,76,488
2,05,920
3,79,600
4,05,600
20,13,440
20,59,200
New Regime Beneficial
16,640
29,432
-
26,000
-
45,760
-
*HRA exemption is calculated for non-metropolitan cities
Amarpal Chadha, Tax Partner, EY India tells TOI that an income-wise comparison of tax liability under the new and old Regimes reveals a clear trend: the new tax regime offers lower tax outgo across all income brackets, from middle to high-income groups—even when taxpayers under the old regime claim substantial deductions like HRA, Section 80C, NPS, and standard deductions. He explains:
At a gross income of Rs 7.50 lakh, the new income tax regime results in zero tax, while the old regime leads to a liability of Rs 16,640.
Your total eligible tax savings investments should be more than ~Rs 2.00 lakhs for the old regime to be beneficial.
At a gross income of Rs 18 lakh, the new regime offers savings of over Rs 29,432, despite the old regime having a significant amount of deductions.
The total eligible tax savings investments should be more than ~Rs 5.59 lakhs for the old regime to be beneficial.
At a gross income of Rs 25 lakh, even with more than Rs 5.25 lakh in deductions, the old regime tax is Rs 26,000 higher than the tax outgo under the new regime.
The total eligible tax savings investments should be more than ~Rs 6.08 lakhs for the old regime to be beneficial.
At a gross income of Rs 75 lakh, even with significant deductions/exemptions under the old regime, the new regime still proves better by Rs 45,760.
The total eligible tax savings investments should be more than ~Rs 9.58 lakhs for the old regime to be beneficial.
The above examples take into account individuals contributing to NPS (employer' contribution). However, if one does not contribute to such NPS, for an individual having gross income of more than Rs 15.75 lakh, he/she is better off taking new regime only if the eligible tax saving investments under the old tax regime are less than Rs 4,33,333/-
'These findings suggest that the new regime is not only simpler but often more tax-efficient, especially for individuals who may not fully utilize all deductions or prefer a hassle-free filing process.
While the old Regime still holds value for some with structured investments, the broader appeal of the new Regime continues to grow, making it a compelling default choice for many taxpayers,' Amarpal Chadha tells TOI.
Yet another detail that you should not miss is that the new income tax regime is now the default tax regime. While filing ITR, you can choose between the old and new regime. But, if the return is filed after the due date (this year it is September 15, 2025), then you will have to by default file ITR under the new tax regime, the option of old regime would not be available.
(Please note that the above calculations are specific to the numerical examples captured in the above table and may change depending on your specific scenario)
Also Read |
ITR filing: Why are ITR-2 and ITR-3 forms still not available on Income Tax e-filing portal? Top reasons explained
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