New Tax Regime – Savefizuli

Old Tax Regime vS New Tax Regime for FY 2024-25

This blog compares the Old and New Tax Regimes in India for FY 2024-25 (AY 2025-26). The Old Regime offers deductions and exemptions (like 80C, 80D, HRA, LTA) but has higher tax rates.

1 The New Regime has lower tax rates but no deductions/exemptions. A key difference is flexibility: you can switch between regimes annually. 2 The Old Regime suits those with significant tax-saving investments, while the New Regime is ideal for those seeking simplicity and lower taxes without many deductions. 3 Calculating your tax liability under both regimes is recommended to determine the best option for your financial situation.

Understanding the New Tax Regime: Is It the Right Choice for You?

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The New Tax Regime offers lower tax rates but requires forgoing deductions and exemptions available under the Old Regime. It’s simpler, with less paperwork, making it ideal for those with minimal tax-saving investments or those who prefer straightforward tax calculations. Key features include lower tax slabs, no need to claim deductions (like 80C, 80D), and the option to switch between regimes annually (with some restrictions for business income). It’s best suited for young professionals or those not heavily investing in tax-saving instruments. If you rely on deductions like home loan interest or PPF, the Old Regime might be more beneficial. Calculating your taxes under both regimes is recommended to determine the most advantageous option.

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