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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

Professionals in India review the old and new tax regimes every financial year to ensure their tax outgo is optimised under the Income Tax Act, 1961. This decision depends on income level, eligibility for deductions and exemptions, and recent slab changes announced in Budget 2025. While the new tax regime is now the default option with lower slab rates and a higher rebate threshold, the old regime continues to benefit those with substantial deductions. A yearly evaluation hel

Choosing between the old and new tax regimes directly impacts tax outgo, refunds, and long-term planning. With the new tax regime becoming the default and offering tax-free income up to ₹12 lakh after Budget 2025 updates, the decision now depends more on income profile than assumptions. TaxBuddy evaluates both regimes side by side by factoring in income level, deductions, exemptions, and taxpayer category to identify the option that results in the lowest tax liability while r

The new tax regime under Section 115BAC has been the default option for salaried employees since FY 2023–24. While it offers lower slab rates and a nearly tax-free income up to ₹12 lakh after rebate from FY 2025-2026, it removes most commonly used deductions. For salaried individuals with home loans, insurance, or long-term investments, the tax saved through deductions under the old regime often exceeds the benefit of lower slabs. As a result, many employees unknowingly pay h

Wrong tax regime selection under the Income Tax Act, 1961, often triggers demand notices, refund adjustments, or mismatched tax computations. These issues typically occur when deductions under the old regime are claimed without eligibility, or when the new regime is applied without the required forms. Errors by employers or automated portal calculations can further distort the tax outcome. Early correction prevents unnecessary tax demands, and platforms like TaxBuddy simplif

The new tax regime removes most deductions, raising a common question for taxpayers earning interest from savings accounts: is any part of this interest deductible? With 80TTA and 80TTB restricted to the old tax regime, savings interest now falls under fully taxable income when opting for Section 115BAC . Since the Finance Act 2024 made the new regime the default, understanding this shift is essential for planning taxable income accurately and avoiding incorrect claims during

Form 10BA acts as a declaration for individuals claiming rent deductions under Section 80GG when House Rent Allowance is not available. It confirms rent payments, verifies that no residential property is owned at the place of work or residence, and ensures eligibility for the deduction. Section 80GG is specifically designed for salaried and self-employed individuals who pay rent but do not receive HRA, making Form 10BA a mandatory compliance step. Since this deduction applie

House Rent Allowance remains one of the most significant components of tax planning for salaried individuals in India. The rules, however, differ sharply between the old and new tax regimes in 2025. The old regime continues to offer HRA exemption under Section 10(13A), while the new regime under Section 115BAC has removed this benefit entirely, even if HRA is part of the salary. Understanding how exemption is calculated, who qualifies, and when each regime becomes financially