If your annual salary is ₹15 lakh, choosing the right tax regime can save you thousands! The 2025 Budget introduced major changes to the New Tax Regime, including a ₹4 lakh tax-free exemption. But is it better than the Old Regime? Let’s find out.
Old Tax Regime vs New Tax Regime: What’s Better for ₹15 Lakh Earners?
Old Tax Regime
Did You Know Even with new tax benefits, 60% of Indian taxpayers still prefer the Old Regime for maximum savings!
- Allows deductions under 80C, 80D, 24B, HRA, and more.
- Best for those claiming multiple exemptions.
- Tax rates: 5% for ₹2.5L–₹5L, 20% for ₹5L–₹10L, 30% above ₹10L.
- Higher deductions mean lower taxable income.
New Tax Regime (2025 Update)
- Income up to ₹4 lakh is tax-free.
- Standard deduction increased to ₹75,000.
- No deductions, but lower tax rates.
- Tax rates: 5% for ₹4L–₹8L, 10% for ₹8L–₹12L, 15% for ₹12L–₹16L, 20% above ₹16L.
Tax Calculation: ₹15 Lakh Salary
| Particulars | Old Tax Regime (₹) | New Tax Regime (₹) |
|---|---|---|
| Gross Salary | 15,00,000 | 15,00,000 |
| Standard Deduction | 50,000 | 75,000 |
| Other Deductions (80C, 80D, HRA, etc.) | 7,75,000 | 0 |
| Taxable Income | 6,75,000 | 14,25,000 |
| Total Tax | 49,400 | 97,500 |
₹15 Lakh Salary: Which Regime Saves You More?
- Old Regime: Saves ₹48,100 if you claim deductions.
- New Regime: Easier, but higher tax without deductions.
- Break-even salary for switching: If deductions are below ₹4 lakh, New Regime may be better.
Who Should Choose What?
- Old Regime: Best if you have home loan, HRA, insurance, or NPS.
- New Regime: Best if you don’t claim deductions and prefer a simpler tax filing process.
Also Read: No Tax on 12.75 Lakh Income? Here’s How It Works
Conclusion
- The Old Tax Regime is better if you claim multiple deductions like HRA, 80C, 80D, and home loan interest.
- The New Tax Regime is simpler, but you pay more tax if you can’t claim deductions.
- If your deductions exceed ₹4 lakh, the Old Regime is more beneficial.
- If you don’t have major deductions, the New Regime might work better.
- Evaluate your taxable income and deductions before choosing the best option!
Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, financial, or other professional advice. While every effort is made to ensure the accuracy and reliability of the information, laws and regulations may change, and individual circumstances vary.
Readers are encouraged to consult with qualified professionals or official government resources for personalized guidance regarding their specific situations. The author and publisher disclaim any liability for decisions made or actions taken based on the information provided herein.
