Taxation•5 min read•Published: October 2025•TaxVani Advisory Team

Key Tax Planning Strategies for FY 2025-26: New vs Old Tax Regime

A practical guide comparing updated tax slabs, eligible deductions, and the decision matrix for salaried and business professionals in India.

Educational Notice: The information in this publication is provided for general informational and educational purposes only. It does not constitute formal tax, accounting, or legal advice. Specific facts should be evaluated by a qualified professional.

Executive Key Takeaways

The New Tax Regime under Section 115BAC remains the default tax regime for individuals.
Salaried individuals receive an enhanced standard deduction of ₹75,000 under the New Regime.
Section 80CCD(2) employer NPS contributions remain deductible across both regimes up to 14% of basic salary.
Old Regime continues to benefit taxpayers with substantial home loan interest (Sec 24b) and Chapter VI-A deductions.

Choosing between the New and Old Tax Regimes requires a thorough calculation of your personal deduction portfolio. While the New Tax Regime offers lower marginal tax rates, it eliminates traditional deductions such as House Rent Allowance (HRA), Section 80C investments, and Section 80D medical insurance.

For salaried individuals claiming home loan interest under Section 24(b) along with maximum Section 80C and 80D deductions, the Old Regime may still yield significant tax savings. Conversely, for taxpayers with total eligible deductions under ₹3.75 Lakhs, the New Regime generally provides a simpler, lower-tax alternative.

Our recommendation: Conduct a dual-regime comparative computation prior to submitting your investment declarations to your employer, and review advance tax obligations on a quarterly basis.

Statutory References & Official Framework

Income Tax Act, 1961 (Section 115BAC - Concessional Tax Regime)
Section 16(ia) - Standard Deduction for Salaried Employees
Chapter VI-A Deductions (Sections 80C, 80CCC, 80CCD, 80D, 80TTA)

Relevant Services Offered by TaxVani

Our consultancy practice assists individuals and corporate entities with comprehensive compliance relating to the subject of this guide:

Income Tax Return Filing (ITR)Tax Planning & Wealth Structuring

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Executive Key Takeaways

The New Tax Regime under Section 115BAC remains the default tax regime for individuals.

Salaried individuals receive an enhanced standard deduction of ₹75,000 under the New Regime.

Section 80CCD(2) employer NPS contributions remain deductible across both regimes up to 14% of basic salary.

Old Regime continues to benefit taxpayers with substantial home loan interest (Sec 24b) and Chapter VI-A deductions.

Our recommendation: Conduct a dual-regime comparative computation prior to submitting your investment declarations to your employer, and review advance tax obligations on a quarterly basis.