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Filing ITR For AY 2025-26? Old vs New Tax Regime: Which Saves You More On Rs 5 Lakh To Rs 15.50 Lakh Salary?
Still confused about which would be better to opt for when filing your ITR for AY-2025-26. There are two tax slabs for 2025-26: old tax slab vs new tax slab, where old tax slabs consider some deductions but new tax slabs do not. Let's take a look at the tax rate slab.
| Income tax rate slabs (Rs) | Old Regime | New Regime |
|---|---|---|
| Up to 2.50 lakh | Nil | Nil |
| 2.50 lakh to 3.00 lakh | 5% | Nil |
| 3.00 lakh to 5.00 lakh | 5% | 5% |
| 5.00 lakh to 6.00 lakh | 20% | 5% |
| 6.00 lakh to 9.00 lakh | 20% | 10% |
| 9.00 lakh to 10.00 lakh | 20% | 15% |
| 10.00 lakh to 12.00 lakh | 30% | 15% |
| 12.00 lakh to 15.00 lakh | 30% | 20% |
| 15.00 lakh to 50.00 lakh | 30% | 30% |
But still not getting a proper conclusion. So we should understand it with some examples set by Gaurav Sharma, CFO, Taxflick.com.
That will give you a clear brief on options to opt for filing your income tax return before the due date (31 JULY 2025) F.Y 2024-2025 (AY 2025-2026).
But before that we should know the following things:
- A rebate of Rs. 12,500 u/s 87A is applicable for old taxes.
- The rebate of Rs. 25,000 u/s 87A is for tax slabs of new regimes.
Deductions Under Old Regime are
- Deduction u/s 80C up to Rs 1,50,000/-
- NPS U/S 80CCD(1B)
- HRA Exemption
- Medical insurance u/s 80D
- LTA
- Interest on home loan u/s 24b
- Interest on Education loan u/s 80E
- Interest on vehicle loan u/s 80EEB
- Donation u/s 80G
- Saving bank interest u/s 80TTA
- Professional tax
We are taking an example of some salary figures that will generate equal tax in both the old and new tax regimes, but still, the taxable amount will vary, including deductions and rebates, as stated by Gaurav Sharma.
| Salary | Rs 5,00,000.00 | Rs 7,50,000.00 | Rs 9,50,000.00 | Rs 12,50,000.00 | Rs 15,50,000.00 |
|---|---|---|---|---|---|
| Standard Deduction | ₹ 50,000.00 | ₹ 50,000.00 | ₹ 50,000.00 | ₹ 50,000.00 | ₹ 50,000.00 |
| Deduction for old tax regime | ₹ 2,00,000.00 | ₹ 2,37,500.00 | ₹ 3,12,500.00 | ₹ 3,75,000.00 | |
| Taxable income Under Old regime | ₹ 5,00,000.00 | ₹ 6,62,500.00 | ₹ 8,87,500.00 | ₹ 11,25,000.00 | |
| Taxable income Under New Tax regime | ₹ 7,00,000.00 | ₹ 9,00,000.00 | ₹ 12,00,000.00 | ₹ 15,00,000.00 | |
| Tax Under old Regime | ₹ 45,000.00 | ₹ 90,000.00 | ₹ 1,50,000.00 | ||
| Tax after Rebate U/s Rs.12,500 Old Regime | ₹ 32,500.00 | ₹ 77,500.00 | ₹ 1,37,500.00 | ||
| Tax Under New Regime | ₹ 45,000.00 | ₹ 90,000.00 | ₹ 1,50,000.00 | ||
| Tax after Rebate U/s Rs.25000 new regime | ₹ 20,000.00 | ₹ 65,000.00 | ₹ 1,25,000.00 |
- Add 4% Health and Education Cess on all the above taxes
- The taxpayers earning up to Rs 5 lakh have zero tax liability. So, they opt for any option.
- For a salary income of upto Rs 7.50 lakh, if you have an investment amount of Rs 2,00,000 or more eligible for tax deduction, opt for any option.
- If your income is up to Rs 9.50 lakh, and if you have an investment amount of more than Rs 2,37,500, opt for the old tax regime. But if your investment is less than Rs 2,37,500/-, then you should go for the new tax regime.
- For those having an income of upto Rs 12.50 lakh, if you have an investment amount of more than Rs 3,12,500, opt for the old tax regime. But if your investment is less than Rs 3,12,500/-, then you should go for the new tax regime.
- If your salary is upto Rs 15.50 lakh, and if you have an investment amount of more than Rs 3,75,000, then opt for the old tax regime. But if your investment is less than Rs 3,75,000/-, then you should go for the new tax regime.
So, before filing your income tax return, you can calculate the same as per your available investments and choose a better option as per your income group.
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