{"id":47549,"date":"2024-04-19T09:00:00","date_gmt":"2024-04-19T03:30:00","guid":{"rendered":"https:\/\/www.techjockey.com\/blog\/?p=47549"},"modified":"2026-06-18T11:22:39","modified_gmt":"2026-06-18T05:52:39","slug":"new-tax-regime-vs-old-tax-regime","status":"publish","type":"post","link":"https:\/\/www.techjockey.com\/blog\/new-tax-regime-vs-old-tax-regime","title":{"rendered":"New Tax Regime vs Old Tax Regime: Which is Better for Employees"},"content":{"rendered":"\n<div class=\"has-background\">\n<p><strong>Summary:<\/strong> The new tax regime is simple to use and offers lower tax rates but a few deductions. Whereas the old tax regime provides multiple tax breaks but is quite difficult to understand. Look at the new tax regime vs old one to learn more about them in detail below.<\/p>\n<\/div>\n\n\n\n<p>The Indian income tax system levies a tax on the taxpayers depending on their income levels. However, after 2020-21, the method of levying taxes has changed.<\/p>\n\n\n\n<p>The new tax regime was announced where tax rates were reduced but with a reduction in tax-saving opportunities. Additionally, the government introduced several incentives and relief measures in the 2023 Budget to encourage adoption of the new tax regime.<\/p>\n\n\n\n<p>If you are also a taxpayer and wondering about the new regime vs old tax regime and confused about which one to choose, then this article will help you out. Below we will discuss the key differences between these two regimes and their available deductions and exemptions to help you choose the right one.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-tax-slab\"><span class=\"ez-toc-section\" id=\"what_is_a_tax_slab\"><\/span>What is a Tax Slab?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Tax slabs are tiers of the taxable income. Each slab represents a range of income earned by individuals and each slab has a different tax rate. The lower your income is, the less tax you will pay in terms of percentage. Tax slabs ensure that each taxpayer pays fairly as per their salary or income.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-the-new-tax-regime\"><span class=\"ez-toc-section\" id=\"what_is_the_new_tax_regime\"><\/span>What is the New Tax Regime?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The new tax regime came into place in Budget 2020 where the tax slabs were changed, and taxpayers were provided concessional tax rates. But those taxpayers cannot claim various exemptions and deductions like HRA, LTA, 80C, 80D, etc. <\/p>\n\n\n\n<p>As several deductions and exemptions are not available under this regime, some taxpayers may still find the old regime more beneficial depending on their tax-saving investments and eligible deductions.<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-regular\"><table><thead><tr><th>Exemptions &amp; Benefits Still Available Under the New Tax Regime<\/th><\/tr><\/thead><tbody><tr><td>Agricultural income<\/td><\/tr><tr><td>Amount received from a life insurance policy subject to applicable conditions<\/td><\/tr><tr><td>Leave encashment on retirement (subject to prescribed limits)<\/td><\/tr><tr><td>Retrenchment compensation<\/td><\/tr><tr><td>Voluntary Retirement Scheme (VRS) compensation up to the prescribed limit<\/td><\/tr><tr><td>Death-cum-retirement gratuity<\/td><\/tr><tr><td>Employer&#8217;s contribution to NPS under Section 80CCD(2)<\/td><\/tr><tr><td>Conveyance and transport allowances allowed for official duties or specified categories of employees<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>The government introduced several significant changes to the new tax regime in Budget 2023. Further revisions were announced in Budget 2025 and are applicable for FY 2025-26 (AY 2026-27). These changes are:<\/p>\n\n\n\n<ul>\n<li><strong>Higher Tax Rebate Limit:<\/strong> Under Section 87A, resident individuals opting for the new tax regime can claim a rebate of up to INR 60,000 if their taxable income does not exceed INR 12 lakh. Marginal relief is also available where income slightly exceeds INR 12 lakh, ensuring that additional tax does not exceed the amount by which income exceeds the threshold.<\/li>\n\n\n\n<li><strong>Streamlined Tax Slabs:<\/strong> Under the new tax regime, the basic exemption limit for FY 2025-26 (AY 2026-27) is INR 4 lakhs, with rates ranging from 5% to 30% across seven slabs, which are as follows:<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table is-style-regular\"><table><thead><tr><th>Total Income<\/th><th>Rate of Tax<\/th><\/tr><\/thead><tbody><tr><td>Up to INR 4,00,000<\/td><td>Nil<\/td><\/tr><tr><td>INR 4,00,001- INR 8,00,000<\/td><td>5%<\/td><\/tr><tr><td>INR 8,00,001- INR 12,00,000<\/td><td>10%<\/td><\/tr><tr><td>INR 12,00,001- INR 16,00,000<\/td><td>15%<\/td><\/tr><tr><td>INR 16,00,001- INR 20,00,000<\/td><td>20%<\/td><\/tr><tr><td>INR 20,00,001 &#8211; INR 24,00,000<\/td><td>25%<\/td><\/tr><tr><td>Above INR 24,00,000 <\/td><td>30%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul>\n<li><strong>Tax rates under old and new tax regimes are compared below:<\/strong><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table is-style-regular\"><table><thead><tr><th>Income Slab<\/th><th>Old Tax Regime<\/th><th>New tax Regime<br>(FY 2025-2026)<\/th><\/tr><\/thead><tbody><tr><td>Up to INR 2,50,000<\/td><td>Nil<\/td><td>&#8211;<\/td><\/tr><tr><td>INR 2,50,000 &#8211; INR 4,00,000<\/td><td>5%<\/td><td>Nil<\/td><\/tr><tr><td>INR 4,00,000 &#8211; INR 5,00,000<\/td><td>5%<\/td><td>5%<\/td><\/tr><tr><td>INR 5,00,000 &#8211; INR 8,00,000<\/td><td>20%<\/td><td>5%<\/td><\/tr><tr><td>INR 8,00,000 &#8211; INR 10,00,000<\/td><td>20%<\/td><td>10%<\/td><\/tr><tr><td>INR 10,00,000 &#8211; INR 12,00,000<\/td><td>30%<\/td><td>10%<\/td><\/tr><tr><td>INR 12,00,000 &#8211; INR 16,00,000<\/td><td>30%<\/td><td>15%<\/td><\/tr><tr><td>INR 16,00,000 &#8211; INR 20,00,000<\/td><td>30%<\/td><td>20%<\/td><\/tr><tr><td>INR 20,00,000 &#8211; INR 24,00,000<\/td><td>30%<\/td><td>25%<\/td><\/tr><tr><td>Above INR 24,00,000<\/td><td>30%<\/td><td>30%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul>\n<li><strong>Standard Deduction and Family Pension Deduction<\/strong><\/li>\n<\/ul>\n\n\n\n<ol>\n<li><strong>Salary Income:<\/strong> The standard deduction under the new tax regime is INR 75,000 for FY 2025-26 (the old tax regime continues with INR 50,000). Combined with the INR 12 lakh rebate threshold, this makes salary income up to INR 12.75 lakhs effectively tax-free under the new regime.<\/li>\n\n\n\n<li><strong>Family Pension:<\/strong> Under the new tax regime, family pensioners can claim a deduction of INR 25,000 or one-third of the pension, whichever is less (raised from INR 15,000 effective FY 2024-25). The old regime continues to allow the original INR 15,000 deduction.<\/li>\n\n\n\n<li><strong>Reduced Surcharge for High-Net-Worth Individuals:<\/strong> Under the new tax regime, the surcharge rate on income over INR 5 crore is capped at 25% (versus 37% under the old regime), which helps bring down the effective tax rate.<\/li>\n\n\n\n<li><strong>High Leave Encashment Exemption:<\/strong> This exemption limit for non-government employees has been increased from INR 3 lakhs to INR 25 lakhs.<\/li>\n\n\n\n<li><strong>Default Regime:<\/strong> From FY 2023-24, the new income tax regime has been set as the default option. Salaried individuals can simply select the old regime within their ITR form (<a class=\"wpil_keyword_link\" href=\"https:\/\/www.techjockey.com\/blog\/what-is-itr-1\" title=\"ITR-1\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"2338\">ITR-1<\/a> or ITR-2) each year, with no separate form needed. Those with business or professional income (filing ITR-3 or <a class=\"wpil_keyword_link\" href=\"https:\/\/www.techjockey.com\/blog\/what-is-itr-4-tax-form-that-could-save-you-money\" title=\"ITR-4\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"2337\">ITR-4<\/a>) must instead submit Form 10-IEA before the ITR due date to opt out of the new regime.<\/li>\n<\/ol>\n\n\n\n<p class=\"has-white-background-color has-background\"><em>Section 80C deductions such as EPF, PPF, ELSS, life insurance premiums, tax-saving fixed deposits, and children&#8217;s tuition fees are not available under the new tax regime. However, employer contributions to NPS under Section 80CCD(2) continue to be available.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-old-tax-regime\"><span class=\"ez-toc-section\" id=\"what_is_old_tax_regime\"><\/span>What is Old Tax Regime?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The old tax regime was used before the new tax regime came. Within this regime, there were over 70 exemptions and deductions available like HRA and LTA which can decrease taxable income and tax payments.<\/p>\n\n\n\n<p>One of the most popular deductions is Section 80C, that helps taxpayers to reduce taxable income up to INR 1.5 lakh. The taxpayers are provided with an option to choose between the old and new tax regime.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-list-of-exemptions-and-deductions-in-old-tax-regime-slabs\"><span class=\"ez-toc-section\" id=\"list_of_exemptions_and_deductions_in_old_tax_regime_slabs\"><\/span>List of Exemptions and Deductions in Old Tax Regime Slabs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul>\n<li>Leave travel allowance<\/li>\n\n\n\n<li>House rent allowance<\/li>\n\n\n\n<li>A standard deduction of INR 50,000 was available for salaried individuals.<\/li>\n\n\n\n<li>Deductions under Section 80TTA (interest on savings accounts) and Section 80TTB (interest income for senior citizens)<\/li>\n\n\n\n<li>Entertainment allowance deduction and professional tax (For government employees)<\/li>\n\n\n\n<li>Tax relief on interest paid on home loan for self-occupied or vacant property u\/s 24<\/li>\n\n\n\n<li>Deduction of INR 15,000 permitted from family pension under clause (ii a) (Section 57)<\/li>\n\n\n\n<li>Tax-saving deductions under Chapter VI-A, including Sections 80C, 80CCC, 80CCD(1), 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC and others.<\/li>\n\n\n\n<li>The popular tax-saving investment options include ELSS, NPS, PPF, and a tax break on insurance premiums.<\/li>\n<\/ul>\n\n\n\n<p>Employer contributions to NPS under Section 80CCD(2) and deductions under Section 80JJAA for new employment continue to be available under both the old and new tax regimes.<\/p>\n\n\n\n<p>It is also important to note that if the employee\u2019s contribution to EPF and NPS is above INR 7.5 lakh in a given financial year, then an employee needs to pay tax.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-difference-between-old-vs-new-tax-regime-which-income-tax-regime-is-better-for-employees\"><span class=\"ez-toc-section\" id=\"difference_between_old_vs_new_tax_regime_which_income_tax_regime_is_better_for_employees\"><\/span>Difference Between Old Vs New Tax Regime: Which Income Tax Regime is Better for Employees?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The decision to stay in the old regime or opt for the new regime depends on the deductions and exemptions you are eligible to claim under the old tax regime.<\/p>\n\n\n\n<p>To make things easier for you, we have computed a breakeven point for different income levels of salaried individuals who are below 60 years of age.<\/p>\n\n\n\n<p>In the next section, you can see the breakdown of old tax regime vs new tax regime and choose the right tax regime for yourself.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-breakdown-of-old-tax-regime-vs-new-tax-regime\"><span class=\"ez-toc-section\" id=\"breakdown_of_old_tax_regime_vs_new_tax_regime\"><\/span>Breakdown of Old Tax Regime vs New Tax Regime<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If the eligible deductions and exemptions under the old tax regime are higher than the breakeven threshold for the income level, then it is better you stay in the old regime. However, if the breakeven threshold for your income level is higher, then upgrading to the new tax regime is better.<\/p>\n\n\n\n<p class=\"has-white-background-color has-background\"><em>The breakeven threshold point is the tax amount wherein there is no difference in tax liability for both the old and the new tax regimes.<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-if-you-have-salary-income\"><span class=\"ez-toc-section\" id=\"1_if_you_have_salary_income\"><\/span>1. If You Have Salary Income<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<table border=\"1\" cellpadding=\"8\" cellspacing=\"0\" style=\"border-collapse: collapse; width: 100%;\">\n    <thead>\n        <tr>\n            <th>Income Level<\/th>\n            <th>New Regime Std. Deduction<\/th>\n            <th>New Regime Net Income<\/th>\n            <th>New Regime Tax<\/th>\n            <th>Old Regime Tax (Std. Deduction Only)<\/th>\n            <th>Additional Deductions Needed in Old Regime to Break Even<\/th>\n            <th>Which Regime to Choose?<\/th>\n        <\/tr>\n    <\/thead>\n    <tbody>\n        <tr>\n            <td>INR 7,00,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 6,25,000<\/td>\n            <td>INR 0<\/td>\n            <td>INR 44,200<\/td>\n            <td>INR 1,50,000<\/td>\n            <td>New regime better unless old-regime deductions exceed INR 1,50,000<\/td>\n        <\/tr>\n        <tr>\n            <td>INR 8,00,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 7,25,000<\/td>\n            <td>INR 0<\/td>\n            <td>INR 65,000<\/td>\n            <td>INR 2,50,000<\/td>\n            <td>New regime better unless old-regime deductions exceed INR 2,50,000<\/td>\n        <\/tr>\n        <tr>\n            <td>INR 9,00,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 8,25,000<\/td>\n            <td>INR 0<\/td>\n            <td>INR 85,800<\/td>\n            <td>INR 3,50,000<\/td>\n            <td>New regime better unless old-regime deductions exceed INR 3,50,000<\/td>\n        <\/tr>\n        <tr>\n            <td>INR 10,00,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 9,25,000<\/td>\n            <td>INR 0<\/td>\n            <td>INR 1,06,600<\/td>\n            <td>INR 4,50,000<\/td>\n            <td>New regime better unless old-regime deductions exceed INR 4,50,000<\/td>\n        <\/tr>\n        <tr>\n            <td>INR 12,50,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 11,75,000<\/td>\n            <td>INR 0<\/td>\n            <td>INR 1,79,400<\/td>\n            <td>INR 7,00,000<\/td>\n            <td>New regime better unless old-regime deductions exceed INR 7,00,000<\/td>\n        <\/tr>\n        <tr>\n            <td>INR 15,00,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 14,25,000<\/td>\n            <td>INR 97,500<\/td>\n            <td>INR 2,57,400<\/td>\n            <td>INR 5,43,750<\/td>\n            <td>Old regime if deductions &gt; INR 5,43,750; New regime if deductions &lt; INR 5,43,750<\/td>\n        <\/tr>\n        <tr>\n            <td>INR 15,50,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 14,75,000<\/td>\n            <td>INR 1,05,300<\/td>\n            <td>INR 2,73,000<\/td>\n            <td>INR 5,56,250<\/td>\n            <td>Old regime if deductions &gt; INR 5,56,250; New regime if deductions &lt; INR 5,56,250<\/td>\n        <\/tr>\n        <tr>\n            <td>INR 16,00,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 15,25,000<\/td>\n            <td>INR 1,13,100<\/td>\n            <td>INR 2,88,600<\/td>\n            <td>INR 5,68,750<\/td>\n            <td>Old regime if deductions &gt; INR 5,68,750; New regime if deductions &lt; INR 5,68,750<\/td>\n        <\/tr>\n        <tr>\n            <td>INR 18,00,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 17,25,000<\/td>\n            <td>INR 1,50,800<\/td>\n            <td>INR 3,51,000<\/td>\n            <td>INR 6,41,665<\/td>\n            <td>Old regime if deductions &gt; INR 6,41,665; New regime if deductions &lt; INR 6,41,665<\/td>\n        <\/tr>\n        <tr>\n            <td>INR 20,00,000<\/td>\n            <td>INR 75,000<\/td>\n            <td>INR 19,25,000<\/td>\n            <td>INR 1,92,400<\/td>\n            <td>INR 4,13,400<\/td>\n            <td>INR 7,08,332<\/td>\n            <td>Old regime if deductions &gt; INR 7,08,332; New regime if deductions &lt; INR 7,08,332<\/td>\n        <\/tr>\n    <\/tbody>\n<\/table>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-if-you-have-income-other-than-salary\"><span class=\"ez-toc-section\" id=\"2_if_you_have_income_other_than_salary\"><\/span>2. If You have Income Other than Salary<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-tax-under-old-vs-new-regime\">Tax Under Old vs New Regime<\/h4>\n\n\n\n<p>For taxpayers with income other than salary, the choice between the old and new tax regimes primarily depends on the deductions and exemptions available under the old regime.<\/p>\n\n\n\n<p>In general, the new tax regime may be beneficial for taxpayers who do not claim significant deductions under provisions such as Sections 80C, 80D, 80E, 80G, or Section 24(b). On the other hand, taxpayers who claim substantial deductions and exemptions may find the old tax regime more beneficial.<\/p>\n\n\n\n<p>Since the breakeven point differs based on income level, there is no single deduction threshold that applies to all taxpayers. Therefore, it is advisable to calculate tax liability under both regimes before making a decision.<\/p>\n\n\n\n<p><strong>Pro Tip:<\/strong> You can use an income tax calculator to compare your tax liability under both regimes and choose the option that results in lower tax outgo.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-calculate-the-income-tax-amount-with-calculator\"><span class=\"ez-toc-section\" id=\"how_to_calculate_the_income_tax_amount_with_calculator\"><\/span>How to Calculate the Income Tax Amount with Calculator?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An income tax calculator is a tool that helps you calculate your tax amount based on your earnings. There are many <a href=\"https:\/\/www.techjockey.com\/category\/income-tax-software\">income tax software<\/a> available that provide this calculator as a built-in tool to streamline your work. You can also check our website techjockey.com to get help with the <a href=\"https:\/\/www.techjockey.com\/blog\/best-free-tax-software-for-filing-tax-return\">top income taxation software<\/a>.<\/p>\n\n\n\n<p>Let&#8217;s see how you can use this calculator to get an idea about your tax amount:<\/p>\n\n\n\n<p><strong>Step 1:<\/strong> Select the financial year for which you want to calculate taxes.<\/p>\n\n\n\n<p><strong>Step 2:<\/strong> Select your age and click on &#8216;<strong>Go to Next Step<\/strong>&#8216;.<\/p>\n\n\n\n<p><strong>Step 3:<\/strong> Enter the taxable salary after accounting for applicable exemptions and deductions under the old tax regime.<\/p>\n\n\n\n<p><strong>Step 4:<\/strong> Next, add details like rental income, interest paid on rented home, interest income, etc.<\/p>\n\n\n\n<p><strong>Step 5:<\/strong> For Digital Assets income, enter your net income and select &#8216;<strong>Go to Next Step<\/strong>&#8216;.<\/p>\n\n\n\n<p><strong>Step 6:<\/strong> To calculate tax within the old tax slab, enter the tax saving investments within section 80C, 80D, 80G, 80E and 80TTA.<\/p>\n\n\n\n<p><strong>Step 7:<\/strong> After that, choose &#8216;<strong>Calculate<\/strong>&#8216; to get your tax liability. You will get a comparison of your tax liability under the old and new tax regimes.<\/p>\n\n\n\n<p><strong>Step 8:<\/strong> Lastly, you will get all the tax computation details from your mail.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-comparison-of-deductions-and-exemptions-under-the-old-amp-new-tax-regimes\"><span class=\"ez-toc-section\" id=\"comparison_of_deductions_and_exemptions_under_the_old_new_tax_regimes\"><\/span>Comparison of Deductions and Exemptions Under the Old &amp; New Tax Regimes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s compare the deductions and exemptions available under the old and new tax regimes:<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-regular\"><table><thead><tr><th>Particulars<\/th><th>Old Tax Regime<\/th><th>New Tax Regime<\/th><\/tr><\/thead><tbody><tr><td>Income level for rebate eligibility<\/td><td>INR 5 lakhs<\/td><td>INR 12 lakhs<\/td><\/tr><tr><td>Standard Deduction<\/td><td>INR 50,000<\/td><td>INR 75,000<\/td><\/tr><tr><td>Effective Tax-Free Salary income<\/td><td>INR 5.5 lakhs<\/td><td>INR 12.75 lakhs<\/td><\/tr><tr><td>Rebate u\/s 87A<\/td><td>INR 12,500<\/td><td>INR 60,000<\/td><\/tr><tr><td>HRA Exemption<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Leave Travel Allowance (LTA)<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Entertainment Allowance and Professional Tax<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Perquisites for official purposes<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Interest on Home Loan u\/s 24b on: <strong>Self-occupied or vacant property<\/strong><\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Interest on Home Loan u\/s 24b on: <strong>Let-out property<\/strong><\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Deduction u\/s 80C (EPF | LIC | ELSS | PPF | FD | Children&#8217;s tuition fee etc)<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Employee&#8217;s (own) contribution to NPS<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Employer&#8217;s contribution to NPS<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Medical insurance premium &#8211; 80D<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Disabled Individual &#8211; 80U<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Interest on education loan &#8211; 80E<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Interest on Electric vehicle loan &#8211; 80EEB<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Donation to Political party\/trust etc &#8211; 80G<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Savings Bank Interest u\/s 80TTA and 80TTB<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>Other Chapter VI-A deductions<\/td><td>\u2713<\/td><td>X<\/td><\/tr><tr><td>All contributions to Agniveer Corpus Fund &#8211; 80CCH<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Deduction on Family Pension Income<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Gifts upto INR 50,000<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Exemption on voluntary retirement 10(10C)<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Exemption on gratuity u\/s 10(10)<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Exemption on Leave encashment u\/s 10(10AA)<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Daily Allowance<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Conveyance Allowance<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><tr><td>Transport Allowance for a specially abled person<\/td><td>\u2713<\/td><td>\u2713<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-drawbacks-of-old-tax-regime\"><span class=\"ez-toc-section\" id=\"drawbacks_of_old_tax_regime\"><\/span>Drawbacks of Old Tax Regime<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>The old regime has a more intricate structure with several deductions and exemptions distributed across various sections.<\/li>\n\n\n\n<li>Understanding different deductions, calculating their eligibility, and maintaining proper documentation can be time consuming<\/li>\n\n\n\n<li>With multiple deductions and exemptions, there&#8217;s a higher chance of misinterpreting the rules and claiming ineligible deductions.<\/li>\n\n\n\n<li>The advantages of deductions and exemptions are often maximized for individuals in higher tax brackets. Lower income earners who don&#8217;t utilize many deductions might not see a significant advantage in the old regime.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-drawbacks-of-new-tax-regime\"><span class=\"ez-toc-section\" id=\"drawbacks_of_new_tax_regime\"><\/span>Drawbacks of New Tax Regime<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>The new regime doesn&#8217;t offer specific incentives for saving through popular options such as Public Provident Fund (PPF) and Equity Linked Saving Schemes (ELSS).<\/li>\n\n\n\n<li>While the new regime structure is simpler, it offers less flexibility in tax planning compared to the old tax regime.<\/li>\n\n\n\n<li>The new regime may not be as beneficial for senior citizens who have various medical expense deductions or individuals with significant interest income on investments.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-which-to-choose-between-old-tax-regime-and-new-tax-regime\"><span class=\"ez-toc-section\" id=\"which_to_choose_between_old_tax_regime_and_new_tax_regime\"><\/span>Which to Choose Between Old Tax Regime and New Tax Regime<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The choice between the old tax regime and the new tax regime will impact your financial planning and tax liability. Consider factors such as deductions, exemptions, investments, and overall tax liability before choosing a regime.<\/p>\n\n\n\n<p>Moreover, evaluate the tax liabilities of both these regimes to make an informed decision depending on your individual tax needs and requirements.<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-regular\"><table><tbody><tr><td><strong><em>Factors to Choose Old Tax vs New Tax Regime<\/em><\/strong><br><br>1. Rebate and marginal relief<br>2. Exemptions and deductions<br>3. Income Tax Rates<br>4. Surcharge Taxes<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-new-tax-regime-vs-old-tax-regime-faqs\"><span class=\"ez-toc-section\" id=\"new_tax_regime_vs_old_tax_regime_faqs\"><\/span>New Tax Regime vs Old Tax Regime FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h3><span class=\"ez-toc-section\" id=\"what_is_the_new_tax_regime\"><\/span>What is the new tax regime?<span class=\"ez-toc-section-end\"><\/span><\/h3><p class=\"saswp-faq-answer-text\">The new tax regime became effective with Budget 2020 under which tax slabs were changed and taxpayers were provided with concessional tax rates.<\/p><li style=\"list-style-type: none\"><h3><span class=\"ez-toc-section\" id=\"which_is_a_good_old_tax_regime_or_new_tax_regime\"><\/span>Which is a good old tax regime or new tax regime?<span class=\"ez-toc-section-end\"><\/span><\/h3><p class=\"saswp-faq-answer-text\">The old regime offers more tax breaks but is complex. The new regime is simpler with lower tax rates, but fewer deductions. Therefore, analyze your income and deductions before choosing any of them.<\/p><li style=\"list-style-type: none\"><h3><span class=\"ez-toc-section\" id=\"which_tax_regime_is_better_for_15_lakhs_salary\"><\/span>Which tax regime is better for 15 lakhs salary?<span class=\"ez-toc-section-end\"><\/span><\/h3><p class=\"saswp-faq-answer-text\">For a INR 15 lakh salary, the new tax regime is generally preferred unless you can claim significant deductions under the old tax regime.<\/p><li style=\"list-style-type: none\"><h3><span class=\"ez-toc-section\" id=\"what_are_exemptions_in_the_new_tax_regime\"><\/span>What are exemptions in the new tax regime?<span class=\"ez-toc-section-end\"><\/span><\/h3><p class=\"saswp-faq-answer-text\">Under the new tax regime, most traditional exemptions and deductions such as HRA, LTA, and Section 80C are not available. However, exemptions for agricultural income, gratuity, leave encashment (subject to limits), and employer contributions to NPS under Section 80CCD(2) are still allowed. Additionally, salaried individuals can claim a standard deduction of INR 75,000 under the new regime.<\/p><li style=\"list-style-type: none\"><h3><span class=\"ez-toc-section\" id=\"which_deductions_are_allowed_in_the_new_tax_regime\"><\/span>Which deductions are allowed in the new tax regime?<span class=\"ez-toc-section-end\"><\/span><\/h3><p class=\"saswp-faq-answer-text\">Under the new tax regime, only a limited number of deductions are allowed, including the INR 75,000 standard deduction for salaried individuals, employer contributions to NPS under Section 80CCD(2), and deductions on family pension income (subject to limits). <\/p><li style=\"list-style-type: none\"><h3><span class=\"ez-toc-section\" id=\"which_tax_regime_is_better_for_10_lakhs_salary\"><\/span>Which tax regime is better for 10 lakhs salary?<span class=\"ez-toc-section-end\"><\/span><\/h3><p class=\"saswp-faq-answer-text\">For a INR 10 lakh annual salary, the new tax regime is generally the better option, as eligible taxpayers can benefit from the higher rebate under Section 87A and the INR 75,000 standard deduction.<\/p><li style=\"list-style-type: none\"><h3><span class=\"ez-toc-section\" id=\"can_we_change_tax_regime_while_filing_itr\"><\/span>Can we change tax regime while filing ITR?<span class=\"ez-toc-section-end\"><\/span><\/h3><p class=\"saswp-faq-answer-text\">Yes, you can change the tax regime while filing ITR through the ITR form as per the Budget 2023.<\/p><\/ul><\/div>","protected":false},"excerpt":{"rendered":"<p>Summary: The new tax regime is simple to use and offers lower tax rates but a few deductions. Whereas the old tax regime provides multiple tax breaks but is quite difficult to understand. Look at the new tax regime vs old one to learn more about them in detail below. The Indian income tax system [&hellip;]<\/p>\n","protected":false},"author":168,"featured_media":47576,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7523,9183],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v22.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>New Tax Regime vs Old Tax Regime: Which is Better for Employee<\/title>\n<meta name=\"description\" content=\"Check out the exemptions and deductions available in both the old and new tax regime to choose the right one for you.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.techjockey.com\/blog\/wp-json\/wp\/v2\/posts\/47549\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta 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