Income Tax Calculator –
Old vs New Regime FY 2024-25

Yes. Under the New Tax Regime for FY 2024-25, income up to ₹7 lakh is effectively tax-free due to Section 87A rebate. After standard deduction of ₹75,000, you only need income above ₹7.75 lakh to start paying tax. This makes the new regime extremely attractive for those earning under ₹10 lakh with no major deductions.

The New Regime allows very few deductions: Standard Deduction of ₹75,000 (from FY 2024-25), employer's contribution to NPS (Section 80CCD(2)), leave encashment, and a few others. Major deductions NOT available: 80C (PPF, ELSS, insurance), HRA, 80D (health insurance), home loan interest under Section 24, 80E (education loan), and most other Chapter VIA deductions.

Salaried employees can switch regime every year when filing their ITR. For FY 2024-25, inform your employer about your preferred regime for TDS. New regime is the default — if you don't specify, employer deducts TDS under new regime. File ITR-1 or ITR-2 and select your regime at the time of filing. Self-employed individuals switching to old regime must file Form 10-IEA.

Section 87A provides a tax rebate if your total income doesn't exceed certain limits. Under New Regime: if total income ≤ ₹7 lakh, entire tax liability is waived (rebate = tax amount, max ₹25,000). Under Old Regime: if total income ≤ ₹5 lakh, rebate up to ₹12,500. This means zero actual tax payable even if technically in the 5% slab.