Income Tax Budget 2025 – Did the government hit the last nail on the coffin of Old Tax Regime? Know the benefits of New Tax Slab – New Tax Regime Better Than Old Tax Regime Know How Govt Made Big Change in the Budget 2025 Tutc

The government made a big announcement in the budget (Budget 2025) presented on Saturday, giving relief to the middle class. Finance Minister Nirmala Sitharaman announced to tax free income of up to Rs 12 lakh annually in his budget speech. Apart from this, standard deduction of Rs 75,000 will also be available. After this, it seemed that the government had hit the last nail on the coffin of Old Tax Regim. If you look at the calculation, even after taking all kinds of exemption, New Tax Reseam is proving better than the Old Tax Reset.

By the way, if you do not take deduction benefits, then new tax regime is better in every way. But if your income is 1.5 million or more, then the new tax regime will prove to be a profitable deal. If you have 20 lakh, 25 lakh or 30 lakhs, then new tax regime will be better for you. Let’s know the complete mathematics of benefits …

How to benefit in old tax regime

Old Tax Regim (Slab)
– On income from 0 to 2.5 lakh rupees: 0%
– On income ranging from 2.5 lakh to 5 lakh rupees: 5%
– Income ranging from 05 lakh to 10 lakh rupees: 20%
– On income of more than 10 lakhs: 30%

To understand the calculation, it is assumed that Rakesh’s annual earnings are Rs 15 lakh and he chooses Old Tax Reset, then under it, standard deduction is available up to Rs 50,000. First of all, it reduces his income, after which (15,00,000-50,000 = 14,50,000 rupees), tax is Rs 14.50 lakh in the tax radius.

After this, Rakesh can save Rs 1.5 lakh under 80C. For this, you have to invest in EPF, PPF, ELSS, NSC. You can avail income tax on the amount of two children in tuition fees up to Rs 1.5 lakh. Then his taxable income is reduced to Rs 1.5 lakh and reduces to Rs 13 lakh. If it can save a tax of Rs 50,000 under Section 80CCD (1B) on investment in National Pension Scheme (NPS). Due to which taxable income is reduced to Rs 12.50 lakh.

You can take more discounts in this and suppose Rakesh has taken a home loan, then under 24B, he can save up to Rs 2 lakh. If you also reduce this in annual income, then only Rs 10.50 lakh income tax comes under the scope. Apart from this, by taking a medical policy under section 80D of Income Tax, you can get additional deduction of up to Rs 50,000 by purchasing a medical policy in addition to Rs 25 thousand in the name of his parents and to get additional deductions of up to Rs 50,000 and to mix all these discounts. After the total tax liability, there is an income of Rs 9.75 lakh, on which an income tax of Rs 1,11,800 is made according to the Old Tax Reset.

Calculation from New Tax Reseam (2025)
If you look at the changes made in the Income Tax Slab under the New Tax Regime on Saturday, then the income of 15 lakhs comes under the tax of 15 percent. Now if Rakesh chooses New Tax Resetam, then it gets a standard deduction of more than Rs 75,000 from the old tax regime. So 14.25 lakh rupees come under the purview of income tax. After that, according to the proposed New Tax Slab-2025, calculate the tax.

After reducing standard deduction ….
1500000- 75000 = 14,25000 rupees

0–4 0% = 0
4–8 5% = 20,000 rupees
8–12 10% = 40,000 rupees
12–16 15% = 33,750 rupees

Now in the slab of 12 to 16 lakhs, the income of 15 lakh income of 15 lakhs is Rs 2.25 lakh, on which 15 percent income tax is applied. Accordingly, income tax on income of 15 lakhs is made Rs 93,750, there is a separate provision of 4 percent cess, which is made Rs 3750. In this way the total income tax is Rs 97,500.

Direct advantage of Rs 14300
It is clear from this calculation that after the change in the tax slab by the government in Budget 2025, it proves to be a profitable deal for Rakesh to go towards New Tax Regime. If you talk about savings, then by doing so, it saves Rs 14,300 directly on earnings up to Rs 15 lakh. Looking at this difference, it would not be wrong to say that now new tax regime is better than old tax regime.