With Deductions
Default Regime
New Tax Regime (FY 2025-26): This is the default regime. It offers lower tax rates and wider slabs but does not allow most deductions (like 80C, 80D, or HRA). However, it now includes a standard deduction of ₹75,000.
Old Tax Regime: This regime allows you to reduce your taxable income using various investments and expenses (Section 80C, HRA, Home Loan interest, etc.). It is beneficial only if your total deductions are very high.
Under the New Regime, if your taxable income (after standard deduction) is up to ₹12 Lakh, you get a full tax rebate under Section 87A. Effectively, a salaried person earning up to ₹12.75 Lakh pays zero tax.
Yes. Salaried individuals can choose their preferred regime every year at the time of filing their Income Tax Return (ITR). However, for those with business income, the switch is limited.
It is a flat deduction available to all salaried employees. In the New Regime for FY 2025-26, it has been increased to ₹75,000. In the Old Regime, it remains ₹50,000.