Question 1

What is the difference between Old and New Tax Regime?

Accepted Answer

The New Regime (default from FY 2023-24) offers lower tax rates but removes most deductions. The Old Regime has higher rates but allows deductions like 80C, 80D, HRA, home loan interest. Choose whichever results in lower tax after calculating both.

Question 2

What is the Section 87A rebate?

Accepted Answer

Under the New Regime (FY 2025-26), if your taxable income is ₹12 lakhs or less, you get a 100% rebate — meaning zero tax. Under the Old Regime, the rebate applies if taxable income is ₹5 lakhs or less (max rebate ₹12,500).

Question 3

Who should choose the New Tax Regime?

Accepted Answer

The New Regime is generally better if your total deductions are less than ₹3.75 lakhs (for a ₹10L income). It's ideal for people with few investments or those who don't have a home loan. Always calculate both before deciding.

Question 4

What deductions are NOT allowed in the New Regime?

Accepted Answer

The New Regime disallows most deductions including Section 80C, 80D, 80E, HRA exemption, LTA, and home loan interest (Section 24b). Only the enhanced standard deduction of ₹75,000 is available.

Question 5

What is the standard deduction in FY 2025-26?

Accepted Answer

₹75,000 under the New Regime (increased from ₹50,000 in Budget 2024). The Old Regime still allows ₹50,000 standard deduction.

Income Slab	Rate	Income in Slab	Tax
₹0L – ₹4L	0%	₹4,00,000	₹0
₹4L – ₹8L	5%	₹4,00,000	₹20,000
₹8L – ₹12L	10%	₹3,25,000	₹32,500

Income Tax Calculator (FY 2025-26)

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Slab-wise Tax Breakdown (New Regime)

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