Old vs. New Income Tax Regime for AY 2025-26: Which One is Right for You?
Detailed comparative analysis of Income Tax slabs, deductions, and tax calculation formulas for Assessment Year 2025-26.
Understanding AY 2025-26 Tax Provisions
Selecting the correct tax regime for AY 2025-26 requires evaluating gross total income, allowable exemptions under Section 10, and deduction limits under Chapter VI-A.
Comparison Highlights
- New Tax Regime provides standard deduction of ₹75,000 for salaried taxpayers.
- Old Tax Regime permits deduction under Section 80C (up to ₹1.5 Lakh), Section 80D (Health Insurance), and Section 24(b) Home Loan Interest.
- Zero tax liability up to ₹7 Lakhs taxable income under New Tax Regime due to Section 87A rebate.
Step-by-Step Decision Framework
Quantify total eligible deductions under Old Regime. If total deductions exceed ₹3.75 Lakhs to ₹4 Lakhs (depending on income slab), Old Regime delivers higher tax savings.
If you have questions regarding tax planning, financial compliance, or advisory services, feel free to reach out to CA Karishma Singhavi for expert assistance.
Disclaimer: The information in this article is provided for general guidance and educational purposes only and does not constitute formal legal or financial advice.