Old Tax Regime May Make Sense in Only These Cases Now
While the new tax structure announced at the Budget 2025 offers a revised exemption threshold of ₹12 lakh and an additional standard deduction of ₹75,000, does the old tax regime still make sense? The new tax regime does offer significant benefits to those earning up to ₹12.75 lakh and for those exceeding this limit, the choice between regimes depends on investments in tax-saving instruments.
Here is how the old regime may still make sense and who can benefit from it.
- The old regime may provide marginal benefits for incomes between ₹13.75 lakh and ₹15.75 lakh.
- For incomes above ₹24.75 lakh, the old regime will prove beneficial if deductions (excluding the standard deduction) exceed ₹8 lakh.
- For incomes exceeding ₹2 crore, tax savings under the new system are marginal at approximately 0.9%.
- Under the new tax region, the savings begin to decline at ₹30 lakh, with a 10% reduction at ₹45 lakh and only 1.9% at ₹1 crore.
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