What is the NPS deduction benefit?

Under the old regime: up to ₹50,000 additional deduction under Section 80CCD(1B) over and above the ₹1.5L 80C limit. Under the new regime: employer's NPS contribution (up to 10% of salary) is exempt under 80CCD(2).

What is the Section 87A tax rebate?

Section 87A provides full tax rebate if your taxable income is up to ₹5 lakh under the old regime (tax becomes zero), and up to ₹7 lakh under the new regime. This is the rebate before adding 4% cess.

Income Tax Calculator 2024-25 — Old vs New Tax Regime

Q: Which tax regime is better — old or new?

If your total eligible deductions (80C + 80D + HRA + home loan interest etc.) exceed ₹3.75 lakh, the old regime is generally better. If you have fewer deductions, the new regime with its lower tax rates and ₹75,000 standard deduction is better. Use this calculator to compare both for your specific situation.

Q: Can I switch between old and new tax regime every year?

Salaried employees can switch between old and new regime every financial year by informing their employer. However, if you have business income (ITR-3 or ITR-4), you can switch out of the new regime only once.

Q: Is home loan interest deductible in the new tax regime?

No. Home loan interest deduction under Section 24(b) (up to ₹2 lakh for self-occupied property) is only available under the old tax regime. In the new regime, no such deduction is available.

Q: When does surcharge apply?

Surcharge applies when taxable income exceeds ₹50 lakh: 10% surcharge for ₹50L–₹1Cr, 15% for ₹1Cr–₹2Cr, 25% for ₹2Cr–₹5Cr, and 37% for above ₹5Cr (only for old regime; new regime caps at 25%). Surcharge is added to the basic tax before applying 4% cess.

Income & Deductions

Fill in your details below to compare both tax regimes instantly

Annual CTC / Gross Income (₹)

Enter your total CTC (Cost to Company)

Basic Salary (% of CTC)40%

Calculated Basic: ₹4,00,000/yr

City Type

Metro City Non-Metro

Metro: Delhi, Mumbai, Kolkata, Chennai. Affects HRA exemption.

Monthly Rent Paid (₹)

Enter 0 if you don't pay rent

Old Regime Deductions

80C — PF + ELSS + LIC etc.Max ₹1,50,000

80D — Health InsuranceMax ₹25,000

Home Loan Interest — Sec 24(b)Max ₹2,00,000

NPS — 80CCD(1B)Max ₹50,000

Other Deductions (80E, 80G etc.)

Standard Deduction

New Regime Deductions

Standard Deduction: ₹75,000 (FY 2024-25)
No other deductions available except employer NPS contribution (80CCD(2)).

Employer NPS Contribution — 80CCD(2)

Up to 10% of Basic Salary. This is the only deduction allowed in new regime.

Rebate u/s 87A: Zero tax if taxable income ≤ ₹7,00,000 under new regime. Under old regime, zero tax if taxable income ≤ ₹5,00,000.

Tax Comparison — FY 2024-25

Calculating...

Item	Old Regime	New Regime
Gross Income	—	—
HRA Exemption	—	N/A
Standard Deduction	₹50,000	₹75,000
80C Deductions	—	N/A
80D Health Insurance	—	N/A
Home Loan Interest (24b)	—	N/A
NPS Deduction	—	—
Other Deductions	—	N/A
Total Deductions	—	—
Taxable Income	—	—
Income Tax (before cess)	—	—
4% Health & Education Cess	—	—
Total Tax Payable	—	—
Monthly Tax (approx)	—	—
Annual Take-Home	—	—

Tax Comparison — Old vs New Regime

FY 2024-25 Income Tax Slabs

Old Tax Regime

Income Range	Tax Rate
Up to ₹2,50,000	NIL
₹2,50,001 – ₹5,00,000	5%
₹5,00,001 – ₹10,00,000	20%
Above ₹10,00,000	30%

+ 4% Health & Education Cess. 87A rebate: zero tax if taxable income ≤ ₹5L.

New Tax Regime (Default from FY2023-24)

Income Range	Tax Rate
Up to ₹3,00,000	NIL
₹3,00,001 – ₹7,00,000	5%
₹7,00,001 – ₹10,00,000	10%
₹10,00,001 – ₹12,00,000	15%
₹12,00,001 – ₹15,00,000	20%
Above ₹15,00,000	30%

+ 4% Cess. 87A rebate: zero tax if taxable income ≤ ₹7L. New regime is default from FY2023-24.

Old vs New Tax Regime — Who Should Choose What?

Since FY 2023-24, the new tax regime has become the default regime. However, you can opt for the old regime if it saves you more tax. The key question is: are your total deductions large enough to benefit from the old regime's lower effective tax?

Rule of Thumb

If total eligible deductions exceed ₹3.75 lakh, the old regime is likely better.
If your deductions are less, stick with the new regime and enjoy lower slab rates.

The break-even point varies by income level. High earners with a home loan and maximum 80C contributions benefit most from the old regime. Younger employees without a home loan and with limited investments typically save more under the new regime.

What is Standard Deduction?

Standard deduction is a flat deduction from your gross salary, regardless of actual expenses. For FY 2024-25:

Old regime: ₹50,000 (unchanged from FY2018-19)
New regime: ₹75,000 (increased from ₹50,000 in Budget 2024)

This means even without any other deductions, new regime taxpayers get an extra ₹25,000 benefit vs old regime, purely from standard deduction.

Section 80C — 10 Ways to Save Tax

Section 80C allows deduction up to ₹1,50,000 per year. The most popular options:

EPF / VPF: Your Employee Provident Fund contribution (mandatory for salaried)
PPF: Public Provident Fund — 7.1% interest, 15-year lock-in, EEE status
ELSS Mutual Funds: Equity Linked Savings Schemes — 3-year lock-in, market returns (~10–14% historical)
Life Insurance Premium: LIC or any term/endowment premium paid
National Savings Certificate (NSC): 5-year GoI scheme, currently 7.7%
Sukanya Samriddhi Yojana (SSY): For girl child, EEE status, 8.2% interest
5-Year Tax Saver FD: Fixed deposit at any bank for 5 years
Home Loan Principal Repayment: EMI principal component is 80C eligible
Senior Citizens Savings Scheme (SCSS): 8.2% for seniors
Tuition Fees: Tuition fees paid for children (up to 2 children)

HRA Exemption Calculation

House Rent Allowance (HRA) exemption is only available under the old tax regime. The exempt amount is the lowest of:

1. Actual HRA received from employer 2. 50% of Basic Salary (Metro) or 40% of Basic Salary (Non-Metro) 3. Rent Paid − 10% of Basic Salary HRA Exemption = MIN(1, 2, 3) (Any amount above 0 is subtracted from taxable income)

If you live in a company-provided accommodation or do not pay rent, HRA is fully taxable. You can also claim HRA even without submitting actual rent receipts up to ₹3,000/month — beyond that, rent receipts and landlord PAN are required.

Frequently Asked Questions

Which tax regime is better — old or new for FY 2024-25? +

It depends entirely on your deductions. If your total deductions (80C + HRA + 80D + home loan interest + NPS) exceed roughly ₹3.75 lakh, the old regime often saves more tax. For someone earning ₹12L with max 80C (₹1.5L), HRA exemption (₹1.2L), home loan interest (₹2L) = ₹4.7L deductions — old regime saves ~₹60,000 more. Use the calculator above for your exact numbers.

Can I switch between old and new tax regime every year? +

Salaried employees (no business income) can switch between regimes each financial year by declaring their choice to their employer at the start of the year. However, if you have business income (ITR-3 or ITR-4), once you opt out of the new regime, you can only switch back once in your lifetime.

What is the additional NPS benefit under old regime? +

Under Section 80CCD(1B), you can claim an additional ₹50,000 deduction for NPS contributions over and above the ₹1.5L 80C limit. This effectively increases your total deduction ceiling to ₹2L. Under the new regime, only the employer's NPS contribution under 80CCD(2) (up to 10% of basic salary) is exempt.

Is home loan interest deductible in the new tax regime? +

No. Section 24(b) home loan interest deduction (up to ₹2 lakh for self-occupied property) is only available under the old tax regime. In the new regime, this deduction is not permitted. However, if you have a let-out property, the actual interest paid is still deductible under the new regime (set-off and carry-forward rules apply differently).

What is the Section 87A rebate for FY 2024-25? +

Section 87A gives a full tax rebate (tax becomes zero) if your taxable income is: up to ₹5,00,000 under the old regime; up to ₹7,00,000 under the new regime. This means individuals earning up to ₹7L gross (after ₹75K standard deduction = ₹7.75L gross) pay zero tax under the new regime. The rebate is applied before adding 4% cess.

When does surcharge apply to income tax? +

Surcharge is levied on the basic tax when taxable income exceeds ₹50 lakh: 10% surcharge for ₹50L–₹1Cr, 15% for ₹1Cr–₹2Cr, 25% for ₹2Cr–₹5Cr, 37% for above ₹5Cr (old regime only). Under the new regime, surcharge is capped at 25% even for income above ₹5Cr. Surcharge is calculated on the tax, then 4% cess is applied on (tax + surcharge).

Income Tax Calculator 2024-25