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The Union Budget 2025 has brought cheers on the face of the middle class and crores of people. Because you need not pay any tax if you are earning an aggregate of Rs. 12 Lakhs or less during financial year on fulfillment of some terms and conditions. But what is for those who are earning more than R
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The old tax regime offers a wider array of deductions and exemptions, such as Section 80C investments, health insurance premiums (Section 80D), House Rent Allowance (HRA), and home loan interest, which can lead to greater tax savings if fully utilised.
The new tax regime primarily allows for two deductions: the standard deduction for salaried individuals and employer contributions to NPS under Section 80CCD(2).
The equalisation point is the level of deductions under the old tax regime where the tax payable is the same as that under the new tax regime. If you can claim deductions exceeding this point in the old regime, you will pay less tax.
Under Section 80C, taxpayers can claim a deduction of up to Rs 1.5 lakh for eligible investments and expenses, including EPF, PPF, life insurance premiums, and principal home loan repayment.
No, House Rent Allowance (HRA) is not available as a deduction under the new tax regime. It is an exemption available only under the old tax regime.
For individuals earning over Rs 12.75 lakh annually, the choice depends on their ability to claim significant deductions. If you can utilise many deductions available in the old tax regime, it might be more beneficial than the new regime.
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