Question 1

What is the difference between Old and New Tax Regime?

Accepted Answer

The Old Regime allows deductions like 80C, 80D, HRA, and home loan interest but applies higher slab rates. The New Regime (default from FY 2023-24) has lower slab rates but most exemptions and deductions are not available. Choose based on which yields lower total tax.

Question 2

What is Section 87A rebate?

Accepted Answer

Section 87A provides a full tax rebate to individuals with taxable income up to ₹7 lakh under the New Regime (FY 2024-25). This effectively means zero tax for income up to ₹7 lakh. Under the Old Regime, the rebate applies to income up to ₹5 lakh.

Question 3

Is Standard Deduction available in the New Regime?

Accepted Answer

Yes. From FY 2024-25, a standard deduction of ₹75,000 is available under the New Regime (increased from ₹50,000). The Old Regime also allows a ₹50,000 standard deduction for salaried employees.

Question 4

What deductions are available under the Old Regime?

Accepted Answer

Key deductions include: Section 80C (up to ₹1.5 lakh — PF, ELSS, LIC, PPF), Section 80D (health insurance up to ₹25,000 / ₹50,000 for senior citizens), Section 24(b) (home loan interest up to ₹2 lakh), and HRA exemption.

Question 5

Which regime should I choose?

Accepted Answer

If your total deductions (80C, 80D, HRA, home loan) exceed ~₹3.75 lakh, the Old Regime usually saves more tax. Below that threshold, the New Regime typically results in lower tax. This calculator shows the comparison so you can decide.

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