Income Tax rules under New (Alternative) and Old (Regular) Tax Regimes for Individuals/HUF/AOP/BOI across the Assessment Years (AYs) 2024–25 to 2026–27:
NEW TAX REGIME (Section 115BAC)
Applicable to: Individuals, HUF, AOP, BOI
Key Point: No major exemptions/deductions except a few, lower tax rates
Standard Deduction (Salary):
- AY 2024–25: ₹50,000
- AY 2025–26 onwards: ₹75,000
Tax Slabs:
| Income Range | AY 2024–25 | AY 2025–26 | AY 2026–27 |
|---|---|---|---|
| Up to ₹3,00,000 | Nil | Nil | — |
| Up to ₹4,00,000 | — | — | Nil |
| ₹3–6 lakh | 5% | — | — |
| ₹3–7 lakh | — | 5% | — |
| ₹4–8 lakh | — | — | 5% |
| ₹6–9 lakh | 10% | — | — |
| ₹7–10 lakh | — | 10% | — |
| ₹8–12 lakh | — | — | 10% |
| ₹9–12 lakh | 15% | — | — |
| ₹10–12 lakh | — | 15% | — |
| ₹12–15 lakh | 20% | 20% | — |
| ₹12–16 lakh | — | — | 15% |
| ₹15 lakh+ | 30% | 30% | 20% (for 15–20L), 25% (20–24L), 30% (above 24L) |
Section 87A Rebate:
| AY | Rebate Amount | Income Limit |
|---|---|---|
| 2024–25 | ₹25,000 | Up to ₹7,00,000 |
| 2025–26 | ₹25,000 | Up to ₹7,00,000 |
| 2026–27 | ₹60,000 | Up to ₹12,00,000 |
OLD TAX REGIME
Exemption Limits Based on Age:
- Below 60 years: ₹2.5 lakh
- Senior Citizens (60–80 years): ₹3 lakh
- Super Senior Citizens (80+ years): ₹5 lakh
| Income Slab | Tax Rate (All AYs) |
|---|---|
| Up to ₹2.5 lakh | Nil |
| ₹2.5 – ₹5 lakh | 5% |
| ₹5 – ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
Section 87A Rebate (Old Regime):
- ₹12,500 if income ≤ ₹5,00,000 (all AYs)
Deductions/Exemptions Not Allowed Under New Regime
(Not exhaustive but major ones listed below)
| Type | Section | Status |
|---|---|---|
| Standard Deduction (Salary/F.Pension) | Sec. 16(ia)/57(iia) | Allowed from AY 2024–25 |
| Leave Travel Allowance | 10(5) | Not Allowed |
| House Rent Allowance | 10(13A) | Not Allowed |
| Most Special Allowances | 10(14) | Not Allowed |
| Home Loan Interest (Self-Occupied) | 24(b) | Not Allowed |
| Deductions under Chapter VI-A (80C to 80U) | Except: 80CCD(2), 80CCH, 80JJAA, 80LA(1A) | Not Allowed |
| Professional Tax | 16(ii) | Not Allowed |
| Perquisite on Free Food | 17(2)/Rule 3 | Not Allowed |
| Additional Depreciation, Investment Allowance, etc. | 32, 32AD, 35, etc. | Not Allowed |
What’s Still Allowed Under New Regime
- Standard Deduction: ₹50,000 (AY 2024–25), ₹75,000 (from AY 2025–26)
- Employer’s NPS Contribution (80CCD(2))
- Agniveer Corpus Deduction (80CCH)
- Hiring Incentive (80JJAA)
- Certain deductions under 80LA(1A)
- Standard deduction on Family Pension: ₹15,000 (AY 2024–25), ₹25,000 (from AY 2025–26) or 1/3rd of pension, whichever is less
Summary Tips:
Comparing both each year before filing your return.
New Regime is default from AY 2024–25 unless opted out.
New Regime better for taxpayers without significant deductions.
Old Regime may be beneficial if you claim deductions under 80C, 80D, HRA, Home Loan, etc.
For More assistance, feel free to contact us.
Above given information is just for understanding purpose, summary of Income Tax Guidelines may vary if any Govt. decisions/guidelines are modified.