New Tax Regime vs Old

Can FPI registered as an AOP in India eligible to select New tax regime for the AY 2024-25 ?
Replies (2)
Quick Summary
The new tax regime is now the default option for AY 2026-27, but understanding the differences is key. The new regime is often simpler and better if your total deductions are less than Rs 3.75 lakh. Conversely, the old regime may be more beneficial if you have significant investments and deductions like 80C, HRA, or home loan interest exceeding Rs 3.75 lakh. For salaried individuals, communicate your choice to your employer early, and note that switching options are limited for those with business income.

Yes.                 

New regime is now the default for AY 2026-27. Here is how to decide:

New regime works better if:
- Your total investments and deductions (80C, HRA, home loan) are less than Rs 3.75 lakh
- You want simplicity and lower compliance
- Income up to Rs 12 lakh (plus Rs 75,000 standard deduction = Rs 12.75 lakh effective zero-tax)

Old regime works better if:
- You have substantial 80C investments (Rs 1.5 lakh), HRA exemption, and home loan interest
- Combined deductions exceed Rs 3.75 lakh

For salaried: you must communicate your regime choice to your employer before the start of the financial year for TDS purposes. You can switch at ITR filing time if you have no business income.

For those with business income (ITR-3): once you opt out of new regime by filing Form 10-IEA, you can only return to new regime once and cannot switch again.

This [old vs new regime comparison](taxgarden.in/blog/old-vs-new-tax-regime-ay-2026-27-which-is-better) has a slab-wise calculation to show which saves more based on income level.

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