The Old and New Tax Regimes present distinct frameworks for taxation of income. Under the old regime, taxpayers benefit from various exemptions and exemption limits, tailored to specific categories. Notably, the tax rebate limit provides additional relief. Conversely, the new regime simplifies the tax structure by eliminating exemptions while introducing new provisions. This shift aims to streamline the taxation process, offering taxpayers a simplified and potentially more efficient system. The decision between the old and new regimes requires careful consideration of your financial circumstances and preferences. This is because both avenues aim to strike a balance between revenue collection and taxpayer ease.
The old tax regime allows deductions like HRA, LTA, and Section 80, while the New Regime doesn't offer these deductions
Exemption limits vary in the old regime based on age, while the New Regime has a uniform limit of ₹3 Lakhs
Tax rebate limit is ₹5 Lakhs in the old regime and ₹7 Lakhs in the new regime, providing relief to taxpayers
New regime introduces favourable provisions like higher leave encashment limit and family pension deductions
The new tax regime is now the default option, but the old regime still exists, giving taxpayers the flexibility to choose
Understanding the differences helps make an informed decision based on taxable income and investments
Evaluate expenses, use online tax calculators, and choose the regime that best suits your financial situation