Archive · 10 Jun 2025
Choosing the Right Tax Regime for ITR 2025: Old vs. New
When filing your income tax return (ITR), you have two options: the old tax regime and the new tax regime.
The old regime lets you save money on taxes by claiming deductions on investments.
If you've invested in things like insurance or certain savings plans, the old regime could be better.
Also, if you get money for your house rent (HRA), the old regime is a good choice.
If you have borrowed money to buy a house and pay interest, the old regime is useful to deduct your interest payments.
If you are a business owner, you have to complete a form to switch to the old regime.
The new regime may be better if you don't have tax-saving investments.
Taxpayers must choose between old and new tax regimes when filing ITR.
The old tax regime is beneficial if you want to claim tax deductions from investments.
HRA exemption is available under the old tax regime but not in the new.
Deduction of interest on borrowed capital is permitted in the old tax regime.
To opt out of the new regime, Form 10-IEA is required for some taxpayers with business income.
- Who
- Taxpayers filing ITR for the financial year 2024-2025.
- What
- Choosing between old and new tax regimes for income tax returns.
- When
- During the ITR filing season.
- Where
- Not explicitly mentioned.
- Why
- To optimize tax liability based on deductions and exemptions.
- Old Tax Regime Benefit
- Claim deductions on investments
- Deductions NOT Allowed in New Regime
- Chapter VIA (80C, 80D, etc.)
- HRA Exemption
- Available in Old Regime, Not in New
- Interest Deduction
- Allowed for Self-occupied Property in Old Regime
- Opting Out of New Regime
- Submit Form 10-IEA (for ITR-3, 4, 5 with business income)
Sources
Income tax calculator: This is how you can use it to compute your tax liability
ITR Filing for Salaried Employees: Here’s how to maximise your tax refund for FY25
Don't Want IT Notice? Read This NOW!
What Happens If I Don’t File An ITR?