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Tax planning becomes critical when side income is earned alongside a full-time salary, as all earnings are aggregated under the Income Tax Act, 1961. Income from freelancing, rentals, investments, or online gigs can quickly push total income into higher tax slabs if left unplanned. Choosing the correct income head, managing advance tax, and selecting between the old and new tax regimes directly impact tax liability. Structured planning helps reduce interest, penalties, and no

Freelancers in India are often advised to use tax-saving strategies designed for salaried individuals, but this approach leads to incorrect filings and compliance risks. Under the Income Tax Act, freelance income is treated as profits from a business or profession, not salary. This single distinction changes how income is taxed, how deductions apply, and how returns are filed. Salary-based tax planning depends on employer structures like Form 16, fixed TDS, and predefined exe

Professionals in India choose between the old and new tax regimes each year by comparing their final tax liability under both options using the latest income tax slabs, deductions, and rebates. With the new tax regime becoming the default under Section 115BAC and offering higher basic exemption limits, increased standard deduction, and rebate benefits, the decision now depends largely on the level of deductions claimed. Salaried employees, freelancers, and consultants evaluat

Choosing between the old and new tax regimes directly impacts annual tax outgo and cash flow. The decision depends on income composition, eligibility for deductions, and slab-wise tax rates introduced under Budget 2025. TaxBuddy evaluates both regimes using an AI-driven framework that considers salary structure, deductions, exemptions, and business income to identify the lower-tax option. This evaluation removes guesswork by presenting a side-by-side comparison tailored to ea

For FY 2025–26, the new tax regime offers lower slab rates, a higher standard deduction, and tax-free income up to ₹12 lakh through enhanced rebate. Despite these changes, the old tax regime continues to provide better outcomes for salaried individuals whose pay structure includes significant deductions such as HRA, home loan interest, and Chapter VI-A investments. The real advantage now depends less on income level and more on how salary components and deductions are structu

The default new tax regime under Section 115BAC promises simplicity through lower tax slabs, but it removes most exemptions and deductions that salaried employees commonly use. From HRA and LTA to Section 80C and home loan interest, these exclusions significantly alter tax outcomes. Since FY 2024–25, this regime applies automatically unless actively changed, impacting take-home pay for many professionals. Despite revised slabs and enhanced rebates announced in Budget 2025, sa

Presumptive taxation and expense-based planning are two distinct tax computation methods available to professionals under the Income Tax Act, 1961. Presumptive taxation under Section 44ADA simplifies compliance by taxing 50 per cent of gross receipts as income, while expense-based planning allows actual business expenses to be deducted under regular provisions. The choice directly impacts tax liability, compliance burden, and audit exposure. Understanding how both methods wor

Certain salary structures continue to deliver lower tax liability under the old tax regime in FY 2025–26 despite the higher rebate threshold and simplified slabs under the new regime. Salaried individuals with significant House Rent Allowance, home loan interest, and eligible investments often see greater tax savings when deductions are fully utilised. For income levels above ₹15 lakh, the benefit of exemptions and Chapter VI-A deductions can outweigh the rate advantage of th

Switching between the old and new tax regimes under Section 115BAC may appear harmless for salaried individuals, especially when income levels rise or deductions seem limited. However, mid-career regime changes often disrupt long-term tax planning built around consistent investments, housing decisions, and family-related deductions. As careers progress, deductions typically increase, not decline. Frequent regime switching during this phase can reduce the effectiveness of comp

Switching between the old and new tax regimes may appear harmless in the short term, but for many taxpayers, especially professionals transitioning to business income mid-career, this decision can create long-term tax inefficiency. Under India’s current income tax framework, salaried individuals enjoy annual flexibility, while business and professional taxpayers face irreversible lock-in rules. Budget 2024–25 changes and the upcoming Income Tax Bill 2025 further reinforce the