Old vs New Tax Regime: When the Old One Still Saves You More!

With the New Tax Regime being the default from FY 2023–24, many salaried individuals are confused about which one to choose — especially when submitting proofs or filing ITR.

Let’s clear it up with a practical guide to when the Old Regime actually gives you more tax savings.

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1. Quick Recap: What’s the Difference?

New Regime (Default)

• Lower tax rates
• No deductions allowed (80C, HRA, etc.)
• Standard deduction of ₹75,000 now available (as per Budget 2025)

Old Regime

• Higher tax rates
• Full deductions allowed (80C, 80D, HRA, Home Loan Interest, etc.)

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2. When Does Old Regime Save More Tax?

Choose Old Regime if you claim these major deductions:

If your total deductions exceed ₹3.5–₹4 lakh, Old Regime usually results in lower tax.

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3. Salary Level Where Old Regime Wins

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4. How to Switch While Filing ITR?

• You’ll get a pop-up or section in ITR form
• Choose Old or New Regime
• Salaried taxpayers can switch every year
• Business taxpayers need to file Form 10-IEA to opt-out

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Pro Tip:
Use the Income Tax Department’s Regime Comparison Tool on incometax.gov.in before choosing — don’t just rely on Form 16 default.