The Government of India introduced a new income tax regime under Section 115BAC. Taxpayers now have the option to choose between the old tax regime and the new tax regime.

This guide explains both regimes and includes an income tax calculator to help you make the right decision based on your income and deductions.

What is the Old Income Tax Regime?

The old tax regime allows you to claim multiple deductions and exemptions to reduce your taxable income.

Highlights of the Old Regime:

• Standard deduction of ₹50,000
• Deductions under Section 80C, 80D, 24(b), etc.
• HRA, LTA, and other exemptions allowed
• Suitable for those who have made tax-saving investments

Old Regime Tax Slabs (FY 2024-25):

• Up to ₹2.5 lakh – Nil
• ₹2.5 lakh – ₹5 lakh – 5%
• ₹5 lakh – ₹10 lakh – 20%
• Above ₹10 lakh – 30%

What is the New Income Tax Regime?

The new regime offers lower tax rates but does not allow most deductions or exemptions. It was revised in Budget 2023.

Highlights of the New Regime:

• Lower slab rates
• Standard deduction of ₹50,000 (from FY 2023-24)
• No deductions under 80C, 80D, etc.
• Simplified filing for individuals without investments

New Regime Tax Slabs (FY 2024-25):

• Up to ₹3 lakh – Nil
• ₹3 lakh – ₹6 lakh – 5%
• ₹6 lakh – ₹9 lakh – 10%
• ₹9 lakh – ₹12 lakh – 15%
• ₹12 lakh – ₹15 lakh – 20%
• Above ₹15 lakh – 30%

Note: Rebate under Section 87A makes income up to ₹7 lakh tax-free under the new regime.

Old vs New Regime: Key Differences

• Standard Deduction: Allowed in both regimes from FY 2023-24
• 80C Deductions: Allowed in old regime, not in new
• Exemptions like HRA, LTA: Allowed in old regime only
• Home Loan Interest (Section 24): Allowed in old regime only
• Tax Filing: More complex in old regime, simpler in new
• Best For: Old regime suits those with high deductions, new regime suits those with minimal deductions

Why Use an Old vs New Regime Income Tax Calculator?

The calculator helps you make a data-backed decision and avoid unnecessary taxes.

• Compare both regimes instantly
• Understand how deductions impact tax
• Make informed decisions while filing
• Plan better for next financial year

How Does the Calculator Work?

What You Enter:

• Annual gross income
• Deductions (80C, 80D, home loan, etc.)
• Rent paid for HRA, if applicable

What You Get:

• Tax calculation under old regime
• Tax calculation under new regime
• Clear recommendation on which is better
• Amount of tax savings

Example Calculation:

Scenario:

• Gross Salary: ₹14,00,000
• Section 80C: ₹1,50,000
• Section 80D: ₹25,000
• Home Loan Interest (Section 24): ₹1,50,000
• Standard Deduction: ₹50,000

Old Regime Tax:

Net taxable income: ₹10,25,000
Approx. tax payable: ₹1,12,500

New Regime Tax:

Taxable income: ₹13,50,000
Approx. tax payable: ₹1,35,000

Verdict:

Old regime saves ₹22,500 more in this case.

Who Should Choose the Old Regime?

• You invest under 80C (LIC, ELSS, PPF)
• You claim HRA, home loan interest
• You pay health insurance premiums
• You like to plan tax-saving investments

Who Should Choose the New Regime?

• You don’t have many deductions to claim
• You want a simpler return filing experience
• Your salary doesn’t include allowances
• You don’t want to invest just to save tax

Switching Between Regimes

• Salaried individuals can switch every year
• Business income taxpayers must stick with the new regime if opted
• Use the calculator annually before ITR filing

FAQs: Old vs New Regime Income Tax Calculator

Can I use the calculator for AY 2024-25?

Yes, it is updated for FY 2023-24 / AY 2024-25.

Is the old regime still available?

Yes, you can choose either regime when filing your return.

Will my employer deduct TDS based on my selected regime?

Yes, you must inform your employer at the start of the financial year.

What if I choose one regime with my employer and another while filing?

You can choose a different regime during ITR filing if you are a salaried employee.

Conclusion: Choose Wisely, Save More

Every taxpayer’s situation is unique. Use the Old vs New Regime Income Tax Calculator to find which regime helps you save more and make a well-informed tax decision.

Don’t leave it to guesswork. Plan your taxes smartly.