From FY 2020-21, taxpayers can choose between two tax regimes: the Old Regime (with deductions and exemptions) and the New Regime (lower slab rates but no major deductions).
Old Tax Regime:
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Allows deductions under:
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Section 80C (LIC, PPF, ELSS, etc.)
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Section 24(b) (Home Loan Interest)
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HRA, LTA, and standard deduction
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Higher tax slabs
New Tax Regime (FY 2024-25 Slabs):
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Income up to ?3,00,000 – Nil
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?3,00,001 – ?6,00,000 – 5%
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?6,00,001 – ?9,00,000 – 10%
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?9,00,001 – ?12,00,000 – 15%
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?12,00,001 – ?15,00,000 – 20%
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Above ?15,00,000 – 30%
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No major deductions allowed except for:
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NPS employer contribution
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Standard deduction (?50,000 for salaried from AY 2024-25)
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EPF & gratuity exemptions
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Which to Choose?
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If you have high deductions (above ?2.5 lakh), old regime may be better.
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If you don’t claim many deductions, new regime offers better net savings.