Budget 2024 has further reduced the tax burden on those opting for the new tax regime. It has been clear for a couple of years now that the old tax regime is unlikely to get any further concessions. Also see: Budget 2024 modifies NPS deduction 80CCD(2) only for the New Tax Regime!
Tax payers can use our free tool to find out how much tax they need to “save” (that is invest, spend or borrow in avenues that can reduce taxable income) in the old tax regime to pay lower than the new tax regime: Budget 2024: New Tax Regime vs Old Tax Regime Calculator: Check which is better.
Here is a summary of our findings.
| income in Lakhs | After Budget 2024 Your tax deductions (in lakhs) have to be higher than this to use the old regime (incl standard deduction if salaried) | Before Budget 2024 |
| 5 | 0 | 0.00 |
| 6 | 1.05 | 1.05 |
| 7 | 2.10 | 2.10 |
| 8 | 2.13 | 1.88 |
| 8.5 | 2.38 | 2.13 |
| 9 | 2.63 | 2.38 |
| 9.5 | 2.88 | 2.50 |
| 10 | 3.13 | 2.63 |
| 10.5 | 3.25 | 2.75 |
| 11.5 | 3.50 | 3.00 |
| 12.5 | 3.63 | 3.13 |
| 14 | 3.75 | 3.42 |
| 14.5 | 3.92 | 3.58 |
| 15.5 | 4.08 | 3.75 |
| 17 | 4.08 | 3.75 |
| 18 | 4.08 | 3.75 |
| 25 | 4.08 | 3.75 |
| 30 | 4.08 | 3.75 |
| 40 | 4.08 | 3.75 |
| 50 | 4.08 | 3.75 |
| 60 | 4.08 | 3.75 |
| 75 | 4.08 | 3.75 |
| 100 | 4.08 | 3.75 |
| 300 | 4.08 | 3.75 |
| 500 | 4.08 | 3.75 |
After Budget 2024 Your tax deductions (in lakhs) have to be higher than this to use the old regime (incl standard deduction if salaried)
After budget 2024, from 15 lakhs to 500 lakhs (5 Crores) deductions have to be greater than Rs. 4.08 Lakhs for old regime to be beneficial. It was Rs. 3.75 lakhs before the budget.
For example those with a large salary and therefore EPF/NPS deductions more than 1.5 Lakhs a year, health insurance premiums close to the maximum allowed (75,000 – 25,000 for self and Rs 50,000 for parents) plus a home loan interest close to Rs. two lakhs or a large HRA exemption can opt for the old regime. It is silly to invest in a product (eg. NPS) only to choose the old regime
Use our free tool to determine what will work for you: Budget 2024: New Tax Regime vs Old Tax Regime Calculator: Check which is better.
We recommend using the new tax regime expect in cases where the benefit of the old regime organically leads to significant benefits.
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