Introduction: Old or New Tax Regime?
For FY 2024-25 (assessment year 2025-26), choosing between the old and new tax regimes is a big decision. The old regime offers deductions like 80C but higher rates; the new has lower rates but fewer breaks. Picking wrong can cost you thousands. Whether you’re salaried, a freelancer, or a business owner, this guide compares both regimes to help you save. Credfill’s experts in Patna and beyond make it easy to choose and file by July 31, 2025. Let’s break it down.
Old Regime: Deductions Galore
The old regime taxes income at slabs (up to 30% above ₹15 lakh) but allows deductions:
- 80C: ₹1.5 lakh (PPF, ELSS) – saves ₹45,000 at 30%.
- 80D: ₹25,000 (health insurance) – saves ₹7,500.
- HRA: Rent exemptions for salaried folks.
A Patna teacher earning ₹10 lakh saved ₹60,000 with 80C and HRA. Ideal if you invest heavily or have loans.
New Regime: Simpler, Lower Rates
The new regime skips most deductions but offers lower rates (e.g., 10% for ₹6-9 lakh vs. 20% old). Only 80CCD(1B) (NPS, ₹50,000) and employer NPS apply. A Nagpur freelancer earning ₹8 lakh paid ₹52,000 tax (new) vs. ₹65,000 (old, no deductions). Best for those with minimal investments.
How to Choose?
- High Deductions? Old regime wins if you claim ₹2 lakh+ in breaks.
- Low Deductions? New regime’s lower rates save more.
- Compare Both: Calculate tax under each with your income and deductions.
A Bihar client switched to the new regime, saving ₹20,000 with no deductions. Credfill crunches the numbers for you.
Why Credfill?
Choosing regimes is tricky, but Credfill’s experts compare both, optimize deductions, and file your ITR in 2-3 days. Start 2025 right – upload your docs, and we’ll pick the best regime for you.
Need help filing your ITR and claiming your refund for FY 2024–25? Chat with us now on WhatsApp and get started instantly! Alternatively you can book our ITR filing services by visiting our website.
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