Old Tax Regime vs New Tax Regime: Key Differences

The old regime has higher tax rates across three slabs, while the new regime offers lower rates across six slabs.

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The old regime allows exemptions and deductions like 80C, HRA, and LTA, but the new regime removes these benefits except for a few exceptions.

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The old regime involves complex tax calculations with multiple claims, while the new regime simplifies the process by eliminating exemptions.

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The old regime encourages disciplined savings and investments for tax benefits, whereas the new regime provides flexibility without mandatory tax-saving investments.

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The old regime benefits individuals who make significant tax-saving investments, while the new regime suits those with minimal or no investments.

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Under the old regime, you cannot switch during the financial year, but the new regime allows annual switching when filing tax returns.

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In the old regime, take-home pay is lower due to investments for tax savings, whereas the new regime offers higher take-home pay due to lower taxes and no mandatory investments.

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The old regime requires employer-provided exemptions like HRA and LTA, while the new regime eliminates the need for employer exemptions.

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The old regime promotes disciplined financial planning through investments, but the new regime aims to simplify taxes and reduce dependence on exemptions.

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The old regime is rigid with multiple claims, while the new regime offers a simplified and flexible approach.

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