New vs Old Income Tax Regime: Save Rs.1.35 Lakh and Beyond!

In what can be considered a relief for salaried taxpayers in the country, Finance Minister Nirmala Seetharaman’s 2025 budget announced a complete exemption for annual earnings of up to Rs.12 lakh under the new regime. If we include the 75,000 Rs. standard deduction, people earning up to Rs.12.75 Lakh (Rs 1.06 lakh monthly) will have zero tax liability from FY 2025-26. 

With the latest changes made to the new tax regime by Nirmala Seetharaman, it’s safe to say that a lot of taxpayers will find this advantageous over the old regime. Especially with the proposals made in this budget under the new tax regime, public perception of the same had definitely changed a lot compared to last year.  

But, it’s also important to note that the new tax regime’s new form of love doesn’t make the old regime feeble. Each has its own advantages and the old regime will continue to be prevalent and available as an option for salaried professionals while filing the ITR. 

Out of 8.75 crore total taxpayers, 6.3 crore people have already shifted to the new regime and it is expected that an additional 1 crore people will now move to this regime after the 2025 Budget by Nirmala Seetharaman. 

However, the old regime still stands firm in providing tax benefits to individuals. Beyond the house rent allowance, there are still multiple options available for taxpayers to reduce their tax outgo. 

Let’s take a brief look at these options in the old regime to reduce tax outgo. Including all these, a total exceeding Rs.1.35 lakhs can be saved by taxpayers who still want to continue with the old regime.