FY 2024-25 offers a more favourable tax structure under the new regime with higher rebate limits and inclusion of standard deduction, making it the default option. The key difference between the new tax regime 2024 vs 2025 debate lies in the income tax slabs, standard deduction benefits, rebate limits, and treatment as default.
New Tax Regime 2025 Vs 2024: Which is Better?
FY 2023 to 24:
The new regime was optional and had the following slab structure:
No tax up to Rs. 2.5 lakh
5% for Rs. 2.5 to Rs. 5 lakh
10% for Rs. 5 to Rs. 7.5 lakh
15% for Rs. 7.5 to Rs. 10 lakh
20% for Rs. 10 to Rs. 12.5 lakh
25% for Rs. 12.5 to 15 lakh
30% above Rs. 15 lakh.
No standard deduction or exemptions (like HRA, LTA) were allowed. However, a rebate under Section 87A was available only for income up to Rs. 5 lakh, similar to the old regime.
FY 2024-25:
The major overhaul came in FY 2024-25. The new regime is now the default tax regime. The slab rates were simplified and made more taxpayer-friendly:
0% up to Rs. 3 lakh
5% from Rs. 3 to Rs. 7 lakh
10% from Rs. 7 to Rs. 10 lakh
15% from Rs. 10 to Rs. 12 lakh
20% from Rs. 12 to Rs. 15 lakh
30% above Rs. 15 lakh.
A standard deduction of Rs. 50,000 was also introduced (previously unavailable). Most importantly, the Section 87A rebate limit was increased to Rs. 7 lakh, meaning no tax is payable for income up to Rs7 lakh under the new regime.
Another key shift in FY 2024-25 is the removal of exemptions and deductions like 80C, 80D, and HRA under the new regime, although some (like NPS employer contributions) are still allowed. For salaried individuals and pensioners, this regime may now prove more beneficial, especially those who don't have high investments to claim deductions.
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What Is New Tax Regime 2024 Vs 2025?
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2025-06-28T14:42:58+00:00 2025-06-28T14:42:59+00:00Comment
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