Income Tax Slabs: Old vs New Regime — Which Should You Pick for AY 2025-26?
The Income Tax Department has extended the last date for filing returns for FY 2024-25 to September 15, 2025, giving taxpayers an extra 45 days beyond the earlier July 31 deadline.
The Central Board of Direct Taxes (CBDT) said the extension was necessary due to “significant changes in the notified ITR forms” and the time needed to prepare and roll out filing utilities for Assessment Year 2025-26.
New Tax Regime Now Default
For FY 2024-25, the new tax regime will be the default option. Salaried individuals can still opt for the old regime at the time of filing. However, if you file a belated ITR after the due date, it can only be submitted under the new regime.
Key features of the new regime for FY 2024-25:
- Standard deduction: ₹75,000 for salaried and pensioners
- Section 87A rebate: Up to ₹20,000 for residents with taxable income up to ₹7 lakh
- NPS deduction: Up to 14% of basic salary for salaried employees under Section 80CCD(2)
The recently announced “zero tax on income up to ₹12 lakh” applies only to FY 2025-26 (income earned between April 1, 2025, and March 31, 2026) and does not affect the current filing year.
Old Regime Slabs & Benefits
The old tax regime allows a wide range of exemptions and deductions, including:
- Section 80C: Up to ₹1.5 lakh (PPF, ELSS, LIC, etc.)
- HRA, LTA benefits
- Home loan interest: Up to ₹2 lakh (Section 24)
- Health insurance premium: Section 80D
- Education loan interest: Section 80E
- Standard deduction: ₹50,000 for salaried individuals
Which Regime Should You Choose?
The choice depends on your income, eligible deductions, and whether you prefer simplicity or maximising tax savings.
- Choose new regime if you have fewer deductions and want an easier filing process.
- Choose old regime if you claim significant deductions and exemptions.
Taxpayers are advised to use the Income Tax Department’s online calculator or consult a tax expert before filing ITR for AY 2025-26.
