Question 1

What is the difference between old and new tax regime?

Accepted Answer

The old tax regime allows deductions like 80C, 80D, HRA, and others to reduce taxable income. The new tax regime offers lower tax rates but removes most deductions and exemptions. The new regime has a higher standard deduction but no other deductions.

Question 2

Which tax regime is better for salaried employees?

Accepted Answer

It depends on your deductions. If you claim significant deductions under 80C (up to 1.5L), 80D (medical insurance), HRA, and others, the old regime may save more tax. If your total deductions are low, the new regime with its lower slab rates is usually better.

Question 3

Can I switch between old and new regime every year?

Accepted Answer

Yes, salaried employees can switch between old and new regime every financial year. However, individuals with business income can switch back to the old regime only once after opting for the new regime.

Question 4

What is the standard deduction under the new regime?

Accepted Answer

Under the new tax regime for FY 2025-26, the standard deduction is Rs 75,000. For FY 2024-25, it is Rs 75,000 under the new regime and Rs 50,000 under the old regime.

Question 5

Is the new tax regime the default option?

Accepted Answer

Yes, from FY 2023-24 onwards, the new tax regime is the default regime. If you want to opt for the old regime, you need to specifically file Form 10-IEA before the due date of filing your income tax return.

Tax Regime Comparator

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