New vs Old Tax Regime FY 2024-25 & 2025-26: Which One Should You Choose?
In-depth comparison of New vs Old Tax Regime after Budget 2024 revisions. Slabs table, ₹75,000 standard deduction, Section 87A rebate, and the breakeven deduction threshold.
Budget 2024 Revisions: The New Default Tax System
In the Union Budget, the Government of India introduced substantial enhancements to the **New Tax Regime (Section 115BAC)** for Financial Year 2024-25 (Assessment Year 2025-26) and FY 2025-26:
1. **Standard Deduction Increased**: From ₹50,000 up to **₹75,000** for salaried employees and pensioners. 2. **Revised Tax Slabs**: The 15% slab now begins at ₹10 Lakhs (previously ₹9 Lakhs), and the 20% slab begins at ₹12 Lakhs. 3. **Zero Tax up to ₹7.75 Lakhs**: Thanks to the Section 87A rebate on taxable income up to ₹7 Lakhs combined with the ₹75,000 standard deduction.
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Income Tax Slab Comparison Table (FY 2024-25 & FY 2025-26)
| Income Bracket | New Tax Regime Rate | Old Tax Regime Rate | | :--- | :--- | :--- | | **Up to ₹2,50,000** | **0% (Nil)** | **0% (Nil)** | | **₹2,50,001 – ₹3,00,000** | **0% (Nil)** | **5%** | | **₹3,00,001 – ₹5,00,000** | **5%** | **5%** | | **₹5,00,001 – ₹7,00,000** | **5%** | **20%** | | **₹7,00,001 – ₹10,00,000** | **10%** | **20%** | | **₹10,00,001 – ₹12,00,000** | **15%** | **30%** | | **₹12,00,001 – ₹15,00,000** | **20%** | **30%** | | **Above ₹15,00,000** | **30%** | **30%** |
*Note: 4% Health & Education Cess is added to the computed tax in both regimes.*
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The Breakeven Threshold: When is Old Regime Better?
The Old Tax Regime allows extensive Chapter VI-A deductions including: - **Section 80C:** Up to ₹1.5 Lakhs (EPF, PPF, ELSS, Life Insurance, School tuition) - **Section 80D:** Up to ₹25k - ₹1 Lakh (Health insurance for self, family, and senior citizen parents) - **Section 80CCD(1B):** Up to ₹50,000 additional NPS investment - **Section 24(b):** Up to ₹2 Lakhs interest on Home Loan for self-occupied house - **HRA / LTA:** Full exemption subject to rent receipts and company policy
#### Rule of Thumb Breakeven Points: - **Gross Salary ₹10 Lakhs:** Choose Old Regime only if deductions exceed **₹2.50 Lakhs**. - **Gross Salary ₹15 Lakhs:** Choose Old Regime only if deductions exceed **₹3.75 Lakhs**. - **Gross Salary ₹20 Lakhs+:** Choose Old Regime only if deductions exceed **₹4.25 Lakhs**.
If your total deductions are below these thresholds, the **New Tax Regime will almost always yield lower tax and higher monthly in-hand salary**.
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Step-by-Step: Calculate Your Exact Tax Liability
1. Navigate to the **[DocuDev Income Tax Calculator](https://www.docudev.site/tools/income-tax-calculator)**. 2. Enter your **Gross CTC Salary** and other income sources. 3. Fill in your eligible deductions (80C, 80D, NPS, Home Loan Interest). 4. Review the instant comparative summary and visual tax savings badge. 5. Click **Download Tax PDF** to save an official tax computation sheet.