{"id":207,"date":"2026-05-11T14:33:20","date_gmt":"2026-05-11T14:33:20","guid":{"rendered":"https:\/\/bmcassociates.in\/blog\/?p=207"},"modified":"2026-05-11T14:39:50","modified_gmt":"2026-05-11T14:39:50","slug":"new-vs-old-tax-regime-fy-2025-26","status":"publish","type":"post","link":"https:\/\/bmcassociates.in\/blog\/new-vs-old-tax-regime-fy-2025-26\/","title":{"rendered":"New vs Old Tax Regime FY 2025-26: Which One Should You Choose?"},"content":{"rendered":"\n<p>From FY 2023-24 onwards, the New Tax Regime is the default regime in India. But does that mean it is always the better choice? Not necessarily. For FY 2025-26 (AY 2026-27), your decision between the new and old regime can mean a difference of tens of thousands of rupees. This guide breaks down both regimes clearly so you can decide confidently.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<div class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/div>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"#\" data-href=\"https:\/\/bmcassociates.in\/blog\/new-vs-old-tax-regime-fy-2025-26\/#What_Changed_in_the_New_Tax_Regime_for_FY_2025-26\" >What Changed in the New Tax Regime for FY 2025-26?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"#\" data-href=\"https:\/\/bmcassociates.in\/blog\/new-vs-old-tax-regime-fy-2025-26\/#New_Tax_Regime_Slab_Rates_for_FY_2025-26\" >New Tax Regime: Slab Rates for FY 2025-26<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"#\" data-href=\"https:\/\/bmcassociates.in\/blog\/new-vs-old-tax-regime-fy-2025-26\/#Old_Tax_Regime_Slab_Rates_for_FY_2025-26\" >Old Tax Regime: Slab Rates for FY 2025-26<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"#\" data-href=\"https:\/\/bmcassociates.in\/blog\/new-vs-old-tax-regime-fy-2025-26\/#Key_Deductions_Available_ONLY_in_Old_Regime\" >Key Deductions Available ONLY in Old Regime<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"#\" data-href=\"https:\/\/bmcassociates.in\/blog\/new-vs-old-tax-regime-fy-2025-26\/#When_Does_the_Old_Regime_Make_More_Sense\" >When Does the Old Regime Make More Sense?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"#\" data-href=\"https:\/\/bmcassociates.in\/blog\/new-vs-old-tax-regime-fy-2025-26\/#When_Does_the_New_Regime_Make_More_Sense\" >When Does the New Regime Make More Sense?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"#\" data-href=\"https:\/\/bmcassociates.in\/blog\/new-vs-old-tax-regime-fy-2025-26\/#Practical_Example_Rs_15_Lakh_Salary\" >Practical Example: Rs. 15 Lakh Salary<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"#\" data-href=\"https:\/\/bmcassociates.in\/blog\/new-vs-old-tax-regime-fy-2025-26\/#FAQs\" >FAQs<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Changed_in_the_New_Tax_Regime_for_FY_2025-26\"><\/span><strong>What Changed in the New Tax Regime for FY 2025-26?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Budget 2025 brought a landmark change \u2014 income up to Rs. 12 lakh is effectively tax-free under the new regime due to the enhanced rebate under Section 87A. The basic exemption limit has also been raised to Rs. 4 lakh under the new regime, making it attractive for a large section of taxpayers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"New_Tax_Regime_Slab_Rates_for_FY_2025-26\"><\/span><strong>New Tax Regime: Slab Rates for FY 2025-26<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Up to Rs. 4 lakh \u2014 NIL<\/li>\n\n\n\n<li>Rs. 4 lakh to Rs. 8 lakh \u2014 5%<\/li>\n\n\n\n<li>Rs. 8 lakh to Rs. 12 lakh \u2014 10%<\/li>\n\n\n\n<li>Rs. 12 lakh to Rs. 16 lakh \u2014 15%<\/li>\n\n\n\n<li>Rs. 16 lakh to Rs. 20 lakh \u2014 20%<\/li>\n\n\n\n<li>Rs. 20 lakh to Rs. 24 lakh \u2014 25%<\/li>\n\n\n\n<li>Above Rs. 24 lakh \u2014 30%<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Old_Tax_Regime_Slab_Rates_for_FY_2025-26\"><\/span><strong>Old Tax Regime: Slab Rates for FY 2025-26<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Up to Rs. 2.5 lakh \u2014 NIL<\/li>\n\n\n\n<li>Rs. 2.5 lakh to Rs. 5 lakh \u2014 5%<\/li>\n\n\n\n<li>Rs. 5 lakh to Rs. 10 lakh \u2014 20%<\/li>\n\n\n\n<li>Above Rs. 10 lakh \u2014 30%<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Deductions_Available_ONLY_in_Old_Regime\"><\/span><strong>Key Deductions Available ONLY in Old Regime<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Section 80C \u2014 up to Rs. 1.5 lakh (PPF, ELSS, LIC, EPF, etc.)<\/li>\n\n\n\n<li>Section 80D \u2014 Health insurance premium (up to Rs. 25,000-50,000)<\/li>\n\n\n\n<li>HRA Exemption \u2014 House Rent Allowance<\/li>\n\n\n\n<li>LTA \u2014 Leave Travel Allowance<\/li>\n\n\n\n<li>Section 24(b) \u2014 Home loan interest up to Rs. 2 lakh<\/li>\n\n\n\n<li>Section 80TTA \u2014 Interest on savings account up to Rs. 10,000<\/li>\n\n\n\n<li>Standard Deduction \u2014 Rs. 50,000 (salary\/pension)<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_Does_the_Old_Regime_Make_More_Sense\"><\/span><strong>When Does the Old Regime Make More Sense?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If your total deductions (80C + 80D + HRA + Home Loan Interest) exceed Rs. 3.75 lakh for someone earning Rs. 15 lakh, the old regime often saves more tax. Use this simple rule: if your eligible deductions exceed the &#8216;break-even deduction threshold&#8217;, stick to the old regime.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_Does_the_New_Regime_Make_More_Sense\"><\/span><strong>When Does the New Regime Make More Sense?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your income is below Rs. 12 lakh (zero tax under new regime)<\/li>\n\n\n\n<li>You have few or no eligible deductions<\/li>\n\n\n\n<li>You are a first-time earner without PPF\/LIC investments<\/li>\n\n\n\n<li>You are a freelancer or gig worker with limited deduction options<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Practical_Example_Rs_15_Lakh_Salary\"><\/span><strong>Practical Example: Rs. 15 Lakh Salary<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Under the new regime, tax on Rs. 15 lakh would be approximately Rs. 1,17,000 + 4% cess. Under the old regime with deductions of Rs. 3.5 lakh (80C + 80D + Standard), taxable income becomes Rs. 11.5 lakh with tax of approximately Rs. 1,34,400 + cess. In this case, new regime wins. However, add a home loan interest of Rs. 2 lakh and the old regime becomes cheaper.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Q: Can I switch regime every year?<\/strong><\/p>\n\n\n\n<p>A: Salaried employees can switch every year at ITR filing stage. However, if you have business income, switching back from old to new regime has a 5-year lock-in.<\/p>\n\n\n\n<p><strong>Q: Is 80C available in the new regime?<\/strong><\/p>\n\n\n\n<p>A: No. Deductions under Chapter VI-A including 80C, 80D are not available in the new tax regime.<\/p>\n\n\n\n<p><strong>Q: What is the standard deduction in the new regime?<\/strong><\/p>\n\n\n\n<p>A: Rs. 75,000 for salaried employees and pensioners under the new regime from FY 2024-25 onwards.<\/p>\n\n\n\n<p><strong>Need help choosing the right tax regime? BMC Associates \u2014 CA Firm in Delhi NCR \u2014 can analyse your income and deductions and recommend the best regime. Call us at +91-991-084-9998.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>From FY 2023-24 onwards, the New Tax Regime is the default regime in India. But does that mean it is always the better choice? Not necessarily. For FY 2025-26 (AY 2026-27), your decision between the new and old regime can mean a difference of tens of thousands of rupees. This guide breaks down both regimes<\/p>\n","protected":false},"author":1,"featured_media":208,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-207","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/posts\/207","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/comments?post=207"}],"version-history":[{"count":1,"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/posts\/207\/revisions"}],"predecessor-version":[{"id":209,"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/posts\/207\/revisions\/209"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/media\/208"}],"wp:attachment":[{"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/media?parent=207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/categories?post=207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bmcassociates.in\/blog\/wp-json\/wp\/v2\/tags?post=207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}