Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Old tax regime is the traditional Indian income tax structure with higher slab rates but extensive deductions under Chapter VI-A and exemptions.
Old regime lets you claim 80C, HRA, home loan benefits with higher tax rates — suits those with many deductions.
Default until FY2019-20; now requires explicit opt-in each year for eligible taxpayers. Slabs up to 30% plus surcharge and cess. Deductions include 80C, 80D, HRA, LTA, home loan interest under 24(b), etc. Comparison with new regime needed annually.
Employee with ₹1.5 lakh 80C, ₹2 lakh home loan interest, ₹1.2 lakh HRA exemption may pay less tax in old regime despite higher slabs.
Compare tax under both using full deductions. High deductions favour old; minimal deductions favour new lower slabs.
Salaried employees with business income may face restrictions on switching. Salaried without business income can typically choose annually.
New tax regime is default from specified FY unless employee opts for old regime with employer declaration.