New vs Old Tax Regime 2024: Which Should You Choose?
Detailed comparison between new and old tax regimes with examples and calculator
Critical Decision Ahead
Key Differences at a Glance
Tax Slabs:
Standard Deduction:
₹50,000
Deductions Allowed:
80C, 80D, HRA, Home Loan Interest, LTA, etc.
Best For:
Those with investments > ₹2 lakh annually
Tax Slabs:
Standard Deduction:
₹75,000 (increased!)
Deductions Allowed:
Very limited - only standard deduction, NPS employer contribution, etc.
Best For:
Those with minimal investments and deductions
Detailed Comparison Table
| Deduction/Exemption | Old Regime | New Regime |
|---|---|---|
| Standard Deduction | ₹50,000 | ₹75,000 ↑ |
| Section 80C (PPF, ELSS, etc.) | ₹1.5L | Not Allowed |
| Section 80D (Health Insurance) | ₹25-50K | Not Allowed |
| HRA Exemption | Yes | Not Allowed |
| Home Loan Interest (24b) | ₹2L | Not Allowed |
| Leave Travel Allowance (LTA) | Yes | Not Allowed |
Real Examples: Which Saves You More?
Deductions Available:
Old Regime Tax
₹53,950
New Regime Tax
₹1,09,200
Winner: Old Regime
Deductions Available:
Old Regime Tax
₹82,550
New Regime Tax
₹41,600
Winner: New Regime
Who Should Choose Which Regime?
You have significant investments in 80C (PPF, ELSS, Life Insurance)
You pay house rent and claim HRA
You have a home loan (interest deduction up to ₹2L)
You have health insurance premiums to claim under 80D
Total deductions exceed ₹2 lakh
You have minimal investments and deductions (less than ₹2L)
You prefer simplicity with less paperwork
You don't get HRA from employer
You're a young professional just starting career
You want to avoid hassle of maintaining investment proofs
Action Steps
Calculate Both
Use a tax calculator to compute tax under both regimes
Consider Future
Think about your investment plans for the year
Inform Employer
Tell your employer which regime you're opting for
Review Annually
You can switch regimes every year, so review before filing ITR
Document Everything
Keep all investment proofs if choosing old regime
Common Mistakes to Avoid
Watch Out!
Not calculating tax under both regimes before deciding
Forgetting to inform employer about your choice
Losing out on deductions because you didn't plan investments
Not reviewing your choice annually
Conclusion
There's no one-size-fits-all answer. The right regime depends on your specific financial situation. If you have significant deductions (>₹2L), stick with the old regime. If not, the new regime's lower rates will save you more.
Pro Tip
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