New vs. Old Tax Regime: Dynamic Comparison for FY 2024-25
Under the Indian Finance Act 2024, the government introduced key changes to make the New Tax Regime more attractive for individual tax payers. Choosing the right regime is no longer a simple calculation — it requires evaluating standard deductions, exemptions, and investment targets.
1. Revised Slabs Under the New Regime (FY 2024-25)
The slabs under the New Tax Regime (Section 115BAC) have been restructured to provide relief to middle-income earners:
• Up to ₹3,00,000: NIL
• ₹3,00,001 to ₹7,00,000: 5%
• ₹7,00,001 to ₹10,00,000: 10%
• ₹10,00,001 to ₹12,00,000: 15%
• ₹12,00,001 to ₹15,00,000: 20%
• Above ₹15,00,000: 30%
2. Exemption Slabs & Standard Deduction Changes
Under the New Regime, the standard deduction for salaried individuals has been raised to ₹75,000 (up from ₹50,000). Combined with Section 87A rebate benefits, individuals with a total income up to ₹7.75 Lakhs pay zero taxes.
Under the Old Regime, the standard deduction remains capped at ₹50,000, but you retain eligibility for all Chapter VI-A deductions.
- ✓Section 80C (PPF, ELSS, Insurance) up to ₹1.5 Lakhs.
- ✓Section 80D (Health Insurance Premium) up to ₹25,000 (₹50,000 for senior citizens).
- ✓Section 24(b) (Home Loan Interest) up to ₹2 Lakhs.
- ✓House Rent Allowance (HRA) exemptions.
3. Which Regime Should You Choose?
As a rule of thumb, if your total eligible deductions under the Old Regime (80C, 80D, HRA, Home Loan Interest) exceed ₹3.75 Lakhs, the Old Regime may still yield tax savings.
Otherwise, the New Regime is highly beneficial due to lower tax rates, standard deductions of ₹75,000, and a simpler filing experience without the need to lock funds in long-term savings schemes.
Conclusion
We recommend utilizing our interactive regime comparison tool on the Calculators page or consulting with our tax advisory desk to model your specific portfolio and declare the optimal regime to your employer.