New tax regime is now the DEFAULT regime from FY 2024-25

Key mapping

From FY 2024-25 (AY 2025-26), the new concessional tax regime is the DEFAULT. Taxpayers must opt OUT if they want the old regime. Business/profession taxpayers can switch back once.

Explanation

Budget 2023 made the new regime (concessional slabs, no common deductions like 80C/80D/HRA) the default. Salaried employees who want 80C/80D/HRA deductions must file Form 10-IEA to opt for the old regime each year. Business/profession taxpayers can switch from new to old regime once in a lifetime. Under Budget 2025, the rebate under §87A (§141 in 2025 Act) was enhanced — income up to ₹12 lakh is effectively nil-tax under the new regime for most salaried individuals (₹12.75 lakh with standard deduction). Verify on the income-tax portal before filing.

Related terms and sections

new regime old regime default 87A 141 80C tax regime concessional

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Related sections

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All section references are sourced from the Income Tax Act 2025 (official gazette, incometaxindia.gov.in) and cross-referenced against CBDT's comparative statement. Always verify on the official portal before filing. This page is for reference only and does not constitute legal or tax advice.

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