If you’re planning to file your income tax return, remember that only the old tax rules apply for now.
The income tax return (ITR) filing season has begun, and over 1 crore people have already submitted their returns. Many taxpayers are trying to figure out whether the old tax regime or the new one is more beneficial.
This confusion is mostly because of a big announcement in the Union Budget 2025. The government had said that people with income up to Rs 12 lakh won’t have to pay any tax.
It also changed the tax slabs in the new regime. However, many taxpayers mistakenly believe these changes apply this year—but that’s not true.
Rs 12 Lakh Tax-Free Rule from FY 2025–26
The reality is that the Rs 12 lakh tax exemption will apply from the financial year 2025–26. So, this rule will not affect your income from April 1, 2024 to March 31, 2025.
That means, while filing ITR this year, you won’t get this benefit. Current returns must be filed using the existing tax rules.
Chartered Accountant Balwant Jain advises taxpayers to compare both tax regimes before filing. For those with a high HRA (House Rent Allowance) component, the old regime may be more advantageous.
Deductions Still Available in FY 2024–25
Taxpayers filing returns for FY25 can still claim several deductions and exemptions. If you invested in tax-saving schemes during the year, you can get a deduction under Section 80C (up to Rs 1.5 lakh).
Other deductions include:
Section 80D for health insurance premiums
Section 24B for home loan interest
HRA for those in rented accommodation
A standard deduction of Rs 50,000
Altogether, these can help you claim Rs 3–4 lakh in deductions.
Old Regime Is Better for Some
According to Neeraj Aggarwal, Partner at Nangia & Co LLP, the old tax regime offers more benefits to certain income groups. For example, taxpayers can claim:
Rs 1.5 lakh under Section 80C
Up to Rs 75,000 under Section 80D
Deductions on HRA, home loan interest, and education loan
Compare Tax Regimes Before Filing
Neeraj Aggarwal also explains:
If your annual income is Rs 15 lakh, the old regime is better only if you claim around Rs 4 lakh in deductions.
If your income is Rs 20 lakh, the old regime works only if you claim up to Rs 4.5 lakh in deductions.
So, choose your tax regime—old or new—based on careful tax calculation. The Rs 12 lakh tax-free rule and benefits under the new regime will only apply from next year.
