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Top points! Old vs. New Tax Regimes in India

The Indian government introduced a new tax regime in 2020, giving taxpayers the option to switch from the old regime.

The new regime has a flatter tax structure with fewer exemptions and deductions, while the old regime has a more complex structure with more opportunities to save money on taxes.

Tax slabs:

The old tax regime has 7 slabs, while the new tax regime has 4

Exemptions and deductions:

Taxpayers under the new tax regime will have to pay tax on their entire income, minus the standard deduction of ₹50,000.

Surcharge:

Under the old tax regime, the surcharge rate for income above ₹1 crore is 37%, while under the new tax regime, it is 25%.

Compliance:

The new tax regime is simpler to comply with, as there are fewer exemptions and deductions to track.

Flexibility:

The new tax regime gives taxpayers more flexibility in how they choose to invest their money. Under the old tax regime, taxpayers had to choose between claiming deductions for certain investments or paying tax on their income.