Breaking News: The Union Budget 2025 has revamped personal income tax!
- New slabs, higher exemptions, and lower tax rates—but should YOU switch to the new tax regime?
This article uses real calculations from our tax calculator to compare both regimes and help you decide the best option for FY 2025-26.
What’s Changed in the Budget 2025?
The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, has introduced game-changing reforms for salaried individuals:
Income up to ₹12 lakh is now tax-free! (Earlier: ₹7 lakh)
New tax slabs with reduced rates!
Standard deduction increased to ₹75,000 under the new regime
Employer NPS contributions remain tax-free, while EPF benefits are reduced (Introduced in earlier budget – no changes made)
With these changes, many taxpayers are wondering: Should I stay in the old tax regime or shift to the new one? We analyzed real salary data using our Excel Tax Calculator to answer this question.
CTC ₹24 Lakhs: Which Tax Regime Saves You More?
Let’s compare tax liability for a salaried individual earning ₹24 lakh CTC, assuming typical deductions.
Total Deductions Under the Old Regime
| Deduction Component | Amount (₹) |
| Standard Deduction | ₹50,000 |
| HRA Exemption | ₹3,36,000 |
| LTA (Leave Travel Allowance) | ₹1,00,000 |
| Section 80C (EPF, LIC, ELSS, etc.) | ₹1,50,000 |
| NPS Deduction (80CCD(1B)) | ₹50,000 |
| Health Insurance (80D) | ₹50,000 |
| Total Deductions Claimed | ₹7,36,000 |
This brings down the taxable income under the old regime to ₹16,90,000.
Tax Calculation Under Both Regimes
| CTC (₹ Lakh) | Tax Under Old Regime (₹) | Tax Under New Regime (₹) |
| 24 | ₹3,31,968 | ₹2,99,000 |
The New Regime Wins! – Download the excel calculator to see in details
Tax under the new regime is ₹32,968 lower than the old regime.
Even with high deductions (₹7.36 lakh), the new regime results in lower tax.
If you don’t use 80C and 80D deductions fully, switching to the new regime will save you even more!
Why EPF May No Longer Be the Best Option
Employee contributions to EPF no longer qualify for tax deduction under the new regime. However employees preferred to contribute to PF by availing the benefit under old regime. After significant change in slab rates under new regime, EPF became irrelevant for the purpose of tax saving.
Instead, shifting to NPS (National Pension System) is now more tax-efficient, as employer contributions remain completely tax-free and there is no mandate for employee contribution.
Should You Switch to the New Tax Regime?
If your deductions (HRA, 80C, 80D) exceed ₹7 lakh, the old regime might still be slightly better.
If you don’t want to lock funds into EPF and tax-saving investments, the new regime offers lower tax rates and more take-home salary.
Use Our Excel Tax Calculator to Decide!
Not sure which regime to choose? Use our Excel Tax Calculator, which:
Lets you input your salary details
Automatically calculates tax under both old and new regimes
Tells you which option saves you the most money
[Download Our Tax Calculator Now] and instantly see which tax regime is best for YOU!
Final Takeaways
- Tax payers earning less than 12 lakhs are not required to pay tax.
- Taxpayers earning more than ₹12 lakh stand to benefit the from the change in slabs in new regime.
- For high deductions (₹7L+), the old regime still holds value.
- Shifting to NPS is now a smarter tax move than EPF!
- Use our tax calculator to make an informed decision!
Share this guide to help them decide their best tax strategy for FY 2025-26!
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