New Income Tax Regime FY 2024-25: Complete Slab Guide with Calculations

The new income tax regime, introduced as the default option from FY 2023-24 and enhanced further for FY 2024-25, offers simplified tax slabs with lower rates but fewer deductions. This guide breaks down exactly what changed and helps you decide which regime saves you more.

New Tax Regime Slabs for FY 2024-25

Income Slab vs Tax Rate (New Regime)
Up to ₹3,00,000	Nil
₹3,00,001 – ₹6,00,000	5%
₹6,00,001 – ₹9,00,000	10%
₹9,00,001 – ₹12,00,000	15%
₹12,00,001 – ₹15,00,000	20%
Above ₹15,00,000	30%

Key Highlights for FY 2024-25

• Standard deduction increased to ₹75,000 for salaried individuals and pensioners under the new regime
• No tax payable for income up to ₹7 lakh (after rebate under Section 87A) for resident individuals
• The new regime is now the default option — you must specifically opt for the old regime if you want it
• Family pension deduction increased from ₹15,000 to ₹25,000

Old vs New Regime — What You Lose and Gain

Under the new regime, you cannot claim most common deductions, including Section 80C (₹1.5 lakh investments), Section 80D (health insurance), HRA exemption, and home loan interest deduction (for self-occupied property). In exchange, you get significantly lower tax rates across all slabs.

Who Should Choose the Old Regime?

• Individuals with significant 80C investments (PPF, ELSS, life insurance) close to ₹1.5 lakh
• Those paying substantial home loan interest on a self-occupied property
• Salaried individuals claiming high HRA exemption (especially in metro cities)
• Those with health insurance premiums and other Chapter VI-A deductions

Who Should Choose the New Regime?

• Individuals with minimal tax-saving investments
• Those without home loans or with loans on let-out property
• Freelancers and professionals with simple income structures
• Young earners just starting their career with fewer deduction claims

Quick Calculation Example

For a salaried individual earning ₹12,00,000 annually with ₹1,50,000 in 80C investments and ₹2,00,000 HRA exemption: Under the new regime (after ₹75,000 standard deduction), tax works out to approximately ₹71,500. Under the old regime (after all deductions reducing taxable income to ₹7,75,000), tax works out to approximately ₹62,500 — making the old regime more beneficial in this specific case.

How to Choose the Right Regime

Salaried employees can switch between regimes every year when filing ITR. Business/professional income taxpayers (filing ITR-3/4) can switch only once after opting out of the new regime — so the decision requires more careful planning for them. Our CA team can run both calculations for your specific situation and recommend the optimal choice.