₹25L Salary? Pick Wrong Regime, Pay ₹1L Extra
If you earn ₹25 lakh a year, choosing between the old and new tax regime can mean a difference of over ₹1 lakh in taxes. Here is how to figure out which one saves you more money.
That ₹1L+ tax difference buys you 14 months of Netflix, groceries, and chai combined.
Your annual tax bill can drop this much by picking the right regime
Key Takeaways
List every deduction you currently claim — 80C, HRA, home loan interest, NPS — and total them up before comparing regimes this April.
Use the Income Tax Department's free tax calculator at incometax.gov.in to run both regime scenarios on your exact salary and deductions.
Tell your employer your preferred regime before the deadline they set (usually April-May) — switching mid-year is allowed only at ITR filing, not via TDS.
If you earn ₹25 lakh a year, choosing between the old and new tax regime can mean a difference of over ₹1 lakh in taxes. Here is how to figure out which one saves you more money.
Here's what happened: Under the new tax regime for FY 2025-26, a ₹25 lakh salary attracts roughly ₹3,27,600 in tax after the ₹75,000 standard deduction — no other deductions allowed.. The old regime allows deductions like ₹1.5L under 80C, ₹25,000 HRA, ₹2L home loan interest, and NPS — slashing taxable income significantly for those who invest.. A salaried person maximising deductions under the old regime can bring taxable income below ₹16 lakh, potentially saving over ₹1 lakh versus the new regime..
What you should do: List every deduction you currently claim — 80C, HRA, home loan interest, NPS — and total them up before comparing regimes this April.. Use the Income Tax Department's free tax calculator at incometax.gov.in to run both regime scenarios on your exact salary and deductions.. Tell your employer your preferred regime before the deadline they set (usually April-May) — switching mid-year is allowed only at ITR filing, not via TDS..
If your total deductions exceed ₹3.75 lakh, the old regime almost always wins at a ₹25L salary. Below that threshold, the new regime's lower slab rates are cheaper.
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This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.