Income Tax Budget 2025 LIVE: New vs old tax regime— Which one should you choose now?

 

he Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, introduced significant changes to India's income tax structure, particularly concerning the new tax regime.axpayers are now faced with a choice between the new tax regime and the old tax regime.his article aims to elucidate the differences between the two and guide you in making an informed decision. Key Highlights of the Union Budget 2025

• Increased Tax Exemption Limit: nder the new tax regime, individuals earning up to ₹12 lakh annually are exempt from income tax.or salaried taxpayers, a standard deduction of ₹75,000 raises this exemption limit to ₹12.75 lakh.citeturn0search11
• Revised Tax Slabs: he new tax regime offers revised tax slabs with reduced rates, aiming to increase disposable income and stimulate consumption.citeturn0search11 Understanding the Old Tax Regime

he old tax regime provides taxpayers with various exemptions and deductions, such as those under Section 80C, 80D, and housing loan interest.hile these can significantly reduce taxable income, they require meticulous investment planning and documentation. Comparing the New and Old Tax Regimes

Annual Income	Tax Payable (Old Regime)	Tax Payable (New Regime)	Tax Savings in New Regime
₹12 lakh	₹1,77,500	₹0	₹1,77,500
₹25 lakh	₹4,57,000	₹3,43,000	₹1,14,000
Note: The above calculations are illustrative. Actual tax liability may vary based on individual circumstances.*
Which Regime Should You Choose?

he decision between the new and old tax regimes hinges on individual financial situations:

• New Tax Regime: eneficial for those who prefer a simplified tax structure without the need for multiple investments to claim deductions.t offers lower tax rates with no exemptions.
• Old Tax Regime: uitable for individuals who have significant investments in tax-saving instruments and can claim substantial deductions, thereby reducing their taxable income. Conclusion

he Union Budget 2025 has introduced substantial changes aimed at increasing disposable income and boosting economic growth.axpayers should carefully assess their financial situations, investment portfolios, and future goals to determine which tax regime aligns best with their needs.onsulting with a tax professional can provide personalized insights and aid in making an informed decision. navlistIndia's Budget 2025: Key Income Tax Reforms and Economic Implicationsturn0news22,turn0news23,turn0news24