New Tax Regime vs. Old Tax Regime Post Budget 2025: 1. Key Changes in the New Tax Regime - No tax liability up to ₹12 lakh due to increased exemption limits. - Basic exemption limit raised to ₹4 lakh. - New 25% tax slab introduced for incomes ₹20-24 lakh. - Higher standard deduction of ₹75,000 (vs. ₹50,000 in the old regime). 2. Who Benefits from the New Regime? - Middle-class taxpayers (₹12-30 lakh income) see significant tax savings (up to ₹1.1 lakh). - No tax for income up to ₹12 lakh, improving disposable income for expenses like education, healthcare, and home loans. - Simpler compliance with no need for exemptions or deductions. 3. Who Should Stick to the Old Regime? - Taxpayers with high exemptions & deductions (e.g., home loan interest, HRA, LTA, insurance). - Those earning ₹60 lakh+ with deductions above ₹8.5 lakh may pay lower tax in the old regime. - High-income earners who benefit from investment-linked deductions. 4. Exemptions & Deductions Removed in New Regime - No claims for HRA, conveyance allowance, LTA, home loan interest, medical insurance. - No tax-saving investment benefits (PPF, ELSS, NPS, etc.). 5. Strategic Tax Planning - Salaried individuals can opt for employer-provided NPS contributions (up to 14% of basic salary tax-free). - Choosing the right tax regime depends on salary structure, deductions, and financial goals. Conclusion: The new tax regime favours middle-class earners with higher disposable income, while those with significant deductions may still find the old regime beneficial. Taxpayers should evaluate their tax liability before choosing. https://x.com/AdeParimal/status/1888827636027154769