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The new tax regime introduced in 2020 changed the way people look at taxes. The old regime provided different exemptions and deductions, while the aim of the new regime is to reduce the tax rate and bring more money directly to the taxpayer. But in the process, the new regime removed a lot of deduct
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FAQ :
For salaried individuals and pensioners in the new tax regime (FY 2024-25 or AY 2025-26), the Standard Deduction has been increased to Rs 75,000.
Yes, employer contributions to EPF and NPS are tax-exempt under both regimes, up to Rs 7.5 lakh per year. Contributions exceeding this amount are taxable.
Following a CBDT circular in May 2025, gratuity payouts up to Rs 5 lakh are now exempted in the new tax regime under Section 115BAC(1A).
Popular deductions like those under Section 80C (PPF, ELSS, etc.), Section 80D (Health Insurance), Section 80E (Education Loan Interest), Section 24(b) (Home Loan Interest), Section 80G (Donations), HRA, and LTA are not available in the new tax regime.
If you heavily utilise deductions under Section 80C and Section 80D, the old tax regime may be more beneficial for you due to the availability of these specific deductions.
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