5 days ago
Old vs new tax regime: What's better for you in FY 2024–25?
With the deadline to file your income tax return (ITR) now extended to September 15, 2025, taxpayers have a bit more breathing room to decide whether to stick with the old tax regime or shift to the new one. But which is better for you? That depends on how you earn and how much you claim in FLEXIBILITY FOR SALARIED PEOPLEIf you're a salaried employee or a pensioner with no business income, things are fairly simple. You can switch between the old and new tax regimes every year. Just tick the option while filing your return, either ITR-1 or if your salary structure changes or your investments vary each year, you can decide which regime works better RULES FOR BUSINESS OR PROFESSIONAL INCOME
However, if you earn money from a business or profession, the rules are tougher. You can switch back to the old tax regime only once in your lifetime. After that, you're locked you must submit Form 10-IEA before filing your ITR if you want to change your regime. If you forget to file this form, you'll automatically fall under the new tax regime, whether you planned to or DIFFERENCES BETWEEN OLD AND NEW REGIMEThe old tax regime allows several exemptions and deductions, such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), deductions under Sections 80C/ 80D for things like investments, insurance, and medical expenses, and home loan interest under Section 24(b).The new regime, in contrast, is simpler, with lower tax rates but fewer deductions. It suits individuals who do not claim many exemptions. Under the new system, there's no tax on income up to Rs 4 lakh, followed by 5% on Rs 4–Rs 8 lakh, 10% on Rs 8–Rs 12 lakh, and 15% on Rs 12–Rs 16 lakh, and so on. A full tax rebate is available if your total income after deductions is up to Rs 12 WHICH ONE IS BETTER?If you're claiming several deductions such as HRA or interest on a home loan, the old regime might be more beneficial, helping you save more in the other hand, if you have minimal deductions or prefer a hassle-free filing process, the new regime could work better for important point to note is that under the new regime, losses from house property, capital gains, or business income cannot be carried forward, which could impact your tax liabilities in future years.- EndsMust Watch
