New Tax Regime vs Old Tax Regime 2025 — Which Saves You More?

The government made the New Tax Regime the default from FY 2023-24. But is it actually better for you? The answer depends on your income and deductions. Let's break it down.

Tax Slabs — New Regime vs Old Regime FY 2024-25

Income Range	New Regime Tax Rate	Old Regime Tax Rate
Up to ₹3,00,000	Nil	Nil (up to ₹2.5L)
₹3,00,001 – ₹7,00,000	5%	5% (₹2.5L-₹5L)
₹7,00,001 – ₹10,00,000	10%	20% (₹5L-₹10L)
₹10,00,001 – ₹12,00,000	15%	30% (above ₹10L)
₹12,00,001 – ₹15,00,000	20%	30%
Above ₹15,00,000	30%	30%

Key Differences

Feature	New Regime	Old Regime
Standard Deduction	₹75,000	₹50,000
Section 80C (LIC, PPF, ELSS)	❌ Not allowed	✅ Up to ₹1.5L
HRA Exemption	❌ Not allowed	✅ Allowed
Home Loan Interest (24b)	❌ Not allowed	✅ Up to ₹2L
NPS Employer (80CCD 2)	✅ Allowed	✅ Allowed
Leave Travel Allowance	❌ Not allowed	✅ Allowed

Which is Better at Different Income Levels?

Annual Income	New Regime Tax	Old Regime Tax*	Winner
₹7,00,000	₹0 (rebate)	₹0 (rebate)	Tie
₹10,00,000	₹54,600	₹70,200	New ✅
₹12,00,000	₹83,200	₹93,600 – ₹1,56,000	Depends
₹15,00,000	₹1,45,600	₹1,95,000 – ₹2,40,000	New ✅
₹20,00,000	₹2,96,400	₹3,27,600 – ₹3,90,000	New ✅

*Old regime tax assuming maximum deductions of ₹1.5L (80C) + ₹50K (NPS) + HRA + standard deduction

When Old Regime is Better

Old regime wins when you have significant deductions:

• You're paying home loan EMI (₹2L interest deduction under 24b)
• You invest ₹1.5L in PPF, ELSS, LIC under 80C
• You pay high rent in a metro city (HRA exemption)
• You have NPS contributions under 80CCD(1B) — ₹50K extra deduction

Final Recommendation

For most salaried Indians earning below ₹10 lakh with limited deductions — New Regime is better. For those with home loans, high rent, and maximum 80C investments — Old Regime often wins.