Explore the complete income tax slab rates under the old regime for FY 2024-25. Compare with new regime, discover deduction tips, and learn how to save tax smartly. Ideal for salaried individuals, families, and financial planners.
The Indian income tax system offers two regimes: the old tax regime and the new tax regime. While the government continues to nudge taxpayers toward the new regime by offering lower tax rates with no deductions, the old tax regime still holds significant value for individuals who utilize various exemptions and deductions to minimize their taxable income.
In this guide, we focus on the Old Tax Regime slabs for FY 2024-25 (AY 2025-26), compare them with the new regime, and explore ways to optimize tax planning.
Introduction to Income Tax Regimes in India
Since the introduction of the new tax regime in Budget 2020 under Section 115BAC, taxpayers in India now have the flexibility to choose between two tax systems each financial year:
| Feature | Old Tax Regime | New Tax Regime |
|---|---|---|
| Tax Slabs | Higher tax rates | Lower tax rates |
| Deductions & Exemptions | Allowed | Mostly not allowed |
| HRA, LTA, 80C, 80D, etc. | Can be claimed | Cannot be claimed |
| Ideal For | People with investments & expenses | People with fewer deductions |
Each regime comes with its pros and cons, and the decision largely depends on your income structure, investments, and financial goals.
Old Tax Regime: Slabs and Rates for FY 2024-25
The old tax regime continues with the same slab structure as in previous years. It allows taxpayers to claim a wide array of deductions and exemptions, making it beneficial for those who have made investments or incur eligible expenses.
Tax Rates for Individuals Below 60 Years of Age
| Income Range (₹) | Tax Rate |
|---|---|
| 0 – 2.5 lakh | Nil |
| 2.5 lakh – 5 lakh | 5% |
| 5 lakh – 10 lakh | 20% |
| Above 10 lakh | 30% |
Note: Rebate under Section 87A is applicable if total income does not exceed ₹5 lakh, resulting in zero tax liability for such taxpayers.
Tax Rates for Senior Citizens (Aged 60 to 80 years)
| Income Range (₹) | Tax Rate |
|---|---|
| 0 – 3 lakh | Nil |
| 3 lakh – 5 lakh | 5% |
| 5 lakh – 10 lakh | 20% |
| Above 10 lakh | 30% |
Tax Rates for Super Senior Citizens (Above 80 years)
| Income Range (₹) | Tax Rate |
|---|---|
| 0 – 5 lakh | Nil |
| 5 lakh – 10 lakh | 20% |
| Above 10 lakh | 30% |
In addition to the above slab rates, health and education cess at 4% is applicable on the total income tax payable. Surcharge is also applicable if income exceeds specified limits.
For more precise reference, you can review the official documentation shared by the Income Tax Department and updates via NSDL's Tax Information Network.
Why Taxpayers Still Prefer the Old Regime
Despite the new tax regime offering lower tax rates, many taxpayers still opt for the old regime due to the availability of deductions such as:
- Section 80C: Investments in PPF, ELSS, LIC, EPF, etc. up to ₹1.5 lakh.
- Section 80D: Premiums paid on health insurance.
- House Rent Allowance (HRA): For salaried individuals living in rented accommodation.
- Leave Travel Allowance (LTA): Reimbursement of domestic travel expenses.
- Home Loan Interest Deduction: Under Section 24(b), up to ₹2 lakh.
When effectively utilized, these deductions significantly reduce taxable income, sometimes even resulting in zero tax liability for middle-income earners.
Old vs New Tax Regime: Side-by-Side Comparison (FY 2024-25)
One of the most common queries Indian taxpayers have is: Should I choose the old tax regime or the new one? The answer depends on whether your deductions and exemptions outweigh the benefits of lower slab rates under the new regime.
Here’s a detailed comparison of both regimes for individuals below 60 years:
Comparative Tax Slabs: Old vs New Regime (FY 2024-25)
| Income Range (₹) | Old Regime Tax Rate | New Regime Tax Rate |
|---|---|---|
| 0 – 2.5 lakh | Nil | Nil |
| 2.5 lakh – 3 lakh | 5% | 5% |
| 3 lakh – 6 lakh | 5% | 5% |
| 6 lakh – 9 lakh | 20% | 10% |
| 9 lakh – 12 lakh | 20% | 15% |
| 12 lakh – 15 lakh | 30% | 20% |
| Above 15 lakh | 30% | 30% |
Note: Under the new tax regime, a standard deduction of ₹50,000 is allowed from FY 2023-24 onwards. Also, Section 87A rebate is applicable for income up to ₹7 lakh.
Example: Tax Liability Under Both Regimes
Let’s take an example to understand how the two regimes impact your taxes.
Case: Taxpayer earning ₹10 lakh annually
Under Old Tax Regime (Assuming Deductions)
- Standard Deduction: ₹50,000
- Section 80C (Investments): ₹1,50,000
- Section 80D (Health Insurance): ₹25,000
- Taxable Income: ₹7.75 lakh
- Tax Computation:
| Income Slab (₹) | Rate | Tax (₹) |
|---|---|---|
| 0 – 2.5 lakh | Nil | 0 |
| 2.5 – 5 lakh | 5% | 12,500 |
| 5 – 7.75 lakh | 20% | 55,000 |
| Total | ₹67,500 | |
| + 4% Cess | ₹2,700 | |
| Net Tax | ₹70,200 |
Under New Tax Regime (No Deductions)
| Income Slab (₹) | Rate | Tax (₹) |
|---|---|---|
| 0 – 3 lakh | Nil | 0 |
| 3 – 6 lakh | 5% | 15,000 |
| 6 – 9 lakh | 10% | 30,000 |
| 9 – 10 lakh | 15% | 15,000 |
| Total | ₹60,000 | |
| – Rebate u/s 87A | Not applicable | |
| + 4% Cess | ₹2,400 | |
| Net Tax | ₹62,400 |
Observation: In this case, the new regime offers slightly lower tax despite the deductions claimed under the old regime. However, if the taxpayer claims more deductions (e.g., home loan interest), the old regime could be more beneficial.
How to Choose the Right Regime for FY 2024-25
Choosing between the two regimes should be based on tax-saving investments and eligible expenses. If your total deductions (under Sections 80C, 80D, 24(b), etc.) exceed ₹2.5 lakh, the old regime may result in lower tax liability.
The Income Tax Department has made regime selection flexible. You can change the regime each year if you're a salaried individual. You can verify your eligibility and tax calculations using government-verified tools like the TRACES utility or professional calculators.
Key Deductions Available Under Old Regime
The biggest advantage of the old regime is the availability of deductions. Here's a breakdown of commonly claimed ones:
| Section | Deduction Type | Maximum Limit (₹) |
|---|---|---|
| 80C | Investments (ELSS, PPF, LIC, etc.) | 1,50,000 |
| 80D | Health Insurance Premium | 25,000 – 1,00,000 |
| 24(b) | Home Loan Interest (self-occupied house) | 2,00,000 |
| 10(13A) | House Rent Allowance (HRA) | Based on salary & rent |
| 80E | Education Loan Interest | No Limit |
| 80TTA | Interest on Savings Account | 10,000 |
These deductions can collectively reduce taxable income significantly, which is not possible under the new regime.
Tax Planning Strategies Under the Old Regime for FY 2024-25
If you're sticking with the old tax regime, efficient planning can help you save a considerable amount in taxes. The key is to maximize your deductions and exemptions.
Here are some proven strategies you can use to reduce your taxable income under the old regime:
1. Maximize Section 80C Investments
Under Section 80C, you can claim up to ₹1.5 lakh per year by investing in eligible instruments like:
| Investment Option | Lock-in Period | Returns (Approx.) |
|---|---|---|
| Public Provident Fund (PPF) | 15 years | 7.1% (tax-free) |
| Equity Linked Saving Scheme (ELSS) | 3 years | Market-linked (10–14%) |
| National Savings Certificate (NSC) | 5 years | 7.7% (taxable) |
| Employee Provident Fund (EPF) | Till retirement | 8.15% (tax-free) |
| Life Insurance Premiums | Varies | Depends on policy |
A balanced mix of PPF for safety and ELSS for growth often works well for salaried individuals.
2. Health Insurance Premiums (Section 80D)
Medical inflation in India is rising rapidly. Apart from protecting your finances, health insurance also offers tax benefits under Section 80D.
- Self and family: Up to ₹25,000
- Parents (Senior Citizens): Up to ₹50,000
- Preventive health check-ups: Included within above limits (₹5,000 max)
You can read more about the specific rules from the official IRDAI website to help choose a suitable policy and understand premium structures.
3. Claiming HRA Exemption
If you're living in a rented house and receiving HRA as part of your salary, you may be eligible to claim HRA exemption under Section 10(13A).
Here’s how it is calculated:
| Particulars | Amount (₹) |
|---|---|
| Actual HRA received | ₹2,00,000 |
| Rent paid – 10% of Basic Salary (e.g., ₹3,00,000 – ₹60,000) | ₹2,40,000 |
| 50% of Basic Salary (metro city) | ₹1,50,000 |
| Exempt HRA (Least of above) | ₹1,50,000 |
Remember to maintain rent receipts, landlord PAN (if rent exceeds ₹1 lakh/year), and lease agreements for accurate claim support.
4. Home Loan Interest (Section 24b)
You can claim interest on a home loan up to ₹2,00,000 under Section 24b for a self-occupied property. If you let out your property, the entire interest amount is deductible.
Additionally, first-time buyers can claim extra ₹50,000 under Section 80EE if:
- Loan amount < ₹35 lakh
- Property value < ₹50 lakh
- Loan sanctioned between April 2016 and March 2017
These benefits are detailed under the Income Tax Department’s guidelines, which are frequently updated.
Real-World Scenarios: Who Benefits More from the Old Regime?
Let’s break it down by profession and age group to see who typically gains from sticking with the old regime.
1. Salaried Employees with Deductions Above ₹2.5 Lakh
- Usually invest in EPF, LIC, ELSS, claim HRA, 80D, and home loan interest
- Old regime helps reduce taxable income significantly
- Ideal if deductions total more than ₹2.5–3 lakh annually
2. Self-Employed Professionals
- Can claim expenses related to business (travel, equipment, office rent, etc.)
- Also eligible for Section 80C, 80D, and 80E
- If deductions are properly documented, old regime is often beneficial
3. Senior Citizens (Aged 60+)
- Enjoy a higher basic exemption limit: ₹3 lakh
- Can claim up to ₹50,000 on savings interest under Section 80TTB
- Additional ₹1 lakh on health insurance (80D) if both taxpayer and spouse are senior citizens
- Old regime provides better net benefits in most such cases
Common Mistakes to Avoid While Choosing the Old Regime
While the old tax regime offers substantial tax-saving opportunities, many taxpayers either underutilize them or make avoidable errors. Here's a breakdown of common mistakes and how to avoid them:
| Mistake | Impact | How to Avoid |
|---|---|---|
| Not declaring investments in time | Higher TDS by employer | Submit investment proofs before deadline (usually Jan-Feb) |
| Ignoring deductions beyond 80C | Missing benefits under 80D, 80E, 80G, etc. | Check all eligible deductions on Income Tax India portal |
| Failing to compare with the new regime | Might end up paying higher taxes | Use online calculators to compare both regimes |
| Claiming HRA without valid rent documents | Risk of notice or rejection of exemption | Keep rent receipts, PAN of landlord if rent > ₹1 lakh/year |
| Not using full Section 24(b) benefit | Home loan interest benefit not fully used | Prepay interest early in the financial year |
Checklist Before Filing Income Tax Return Under Old Regime
Before you finalize your tax return under the old regime for FY 2024-25, ensure the following steps are complete:
- All investment proofs under Section 80C (PPF, ELSS, LIC, etc.) submitted
- Health insurance premiums under Section 80D considered
- HRA documentation ready (rent agreement, PAN, receipts)
- Interest on home loan (Section 24b) and education loan (80E) accounted
- Donations to registered charities claimed under Section 80G
- Interest from savings accounts claimed under Section 80TTA or 80TTB (for seniors)
- Compared tax liability under both regimes using trusted calculators like ClearTax
Should You Switch to the New Regime?
The right choice between old vs. new regime depends on your individual financial profile.
| Criteria | Old Regime | New Regime |
|---|---|---|
| You claim deductions of ₹2.5 lakh or more | Better option | Less beneficial |
| You have no deductions or exemptions | Unnecessary complexity | Simple, lower tax rate |
| Salaried with high HRA and home loan | Old regime more rewarding | Lacks exemptions |
| Freelancers with minimal investments | Less relevant | Flat-rate beneficial |
Final Thoughts
The old tax regime in FY 2024-25 continues to offer immense value for those who are proactive in tax planning and investment. With careful execution of deductions under Sections 80C, 80D, 24(b), and others, many taxpayers can significantly reduce their taxable income.
However, it’s equally important to review your tax position annually, especially if your income, investments, or exemptions change. A common mistake is blindly sticking to one regime without reevaluation.
Using tools like government-approved e-Filing portals or consulting with a tax professional ensures accuracy and peace of mind during filing.
FAQ
What are the income tax slabs under the old regime for FY 2024-25?
Under the old regime, the slabs are: ₹0–2.5L: 0%, ₹2.5–5L: 5%, ₹5–10L: 20%, Above ₹10L: 30%. Surcharges and cess apply separately.
Is the old tax regime still available in 2024-25?
Yes, the old regime is still available. Taxpayers can choose between the old and new regimes each financial year.
Which deductions are allowed under the old tax regime?
Deductions under Section 80C, 80D, 80E, 80G, HRA, LTA, standard deduction, and home loan interest are allowed.
Who should choose the old tax regime in 2024-25?
Taxpayers with investments and deductions above ₹2.5 lakh usually benefit more under the old regime.
Can I switch between old and new regimes every year?
Salaried individuals can switch regimes every year. Business professionals must choose carefully as frequent switching is restricted.
Does the old regime allow HRA and home loan benefits?
Yes, both House Rent Allowance (HRA) and home loan interest (Section 24b) benefits are allowed under the old regime.
Where can I compare old vs new regime for my salary?
You can use trusted tools like ClearTax or [Your Site's Income Tax Calculator] to compare your tax liability under both regimes.
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