The financial year 2024-25 is coming to an end, and with the new financial year 2025-26 set to begin on April 1, taxpayers must decide between the New Tax Regime and the Old Tax Regime. If you haven’t fulfilled your tax obligations yet, you have time until March 31, 2025.
Taxpayers can switch between the New Tax Regime and the Old Tax Regime based on their preferences. For example, if you opted for the Old Tax Regime in FY 2024-25, you can switch to the New Tax Regime in FY 2025-26, and vice versa.
The New Tax Regime was introduced by Finance Minister Nirmala Sitharaman during the Union Budget. In the latest 2025-26 budget, key highlights include:
✔ No tax on income up to ₹12 lakh
✔ Revised tax slabs
| Income Range (₹) | Tax Rate (%) |
|---|---|
| Up to ₹12 lakh | No Tax |
| ₹4 lakh - ₹8 lakh | 5% |
| ₹8 lakh - ₹10 lakh | 10% |
| ₹12 lakh - ₹16 lakh | 15% |
| ₹16 lakh - ₹20 lakh | 20% |
| ₹20 lakh - ₹24 lakh | 25% |
✅ Higher exemption: No tax on income up to ₹12 lakh
❌ No deductions: Tax benefits under 80C, 80D, and home loans are NOT available
✅ Simplified structure: Easier tax calculation without exemptions
✔ Higher tax exemption (up to ₹12 lakh)
✔ Simpler tax filing with no complex deductions
✔ Better for those with fewer investments
✖ No tax deductions for investments (80C), medical insurance (80D), home loans
✖ Not beneficial for individuals with high tax-saving investments
📌 If your annual income is below ₹12 lakh, the New Tax Regime is better
📌 If you don’t use tax-saving investments, the New Tax Regime reduces complexity
📌 If you have high investments in 80C, 80D, and home loans, the Old Tax Regime may be better
🔔 Final Takeaway: Analyze your income and deductions before choosing the best tax regime for FY 2025-26!
