Introduction

When it comes to saving taxes, every salaried employee—whether from the government or private sector—wants to make the most of available deductions. One such beneficial provision under the Income Tax Act is Section 80CCD(1B). If you’ve ever wondered how to save extra tax beyond the basic limits of Section 80C, then this section is your golden key.

Imagine having a tool that not only helps you understand these deductions but also prepares your taxes automatically. That’s exactly what the Automatic Income Tax Preparation Software/Calculator All in One in Excel for F.Y. 2025-26 does—it simplifies tax planning for both government and non-government employees.

Before we dive deeper, let’s explore this topic step by step.

Table of Contents

Sr#	Headings
1	Understanding Section 80CCD(1B)
2	Importance of Section 80CCD(1B) in Tax Planning
3	Eligibility Criteria under Section 80CCD(1B)
4	Maximum Deduction Limit under Section 80CCD(1B)
5	Difference between Section 80CCD(1) and 80CCD(1B)
6	NPS – The Backbone of Section 80CCD(1B)
7	Benefits of Investing in NPS for Salaried Employees
8	How to Claim Deduction under Section 80CCD(1B)
9	Step-by-Step Example of Tax Savings
10	Introduction to Automatic Income Tax Preparation Software
11	Features of the All-in-One Excel-Based Calculator
12	How to Use the Excel-Based Calculator
13	Benefits for Government Employees
14	Benefits for Non-Government Employees
15	Final Thoughts and Conclusion

1. Understanding Section 80CCD(1B)

Section 80CCD(1B) was introduced by the Government of India to promote investment in the National Pension System (NPS). It provides an additional deduction of ₹50,000 over and above the ₹1.5 lakh limit under Section 80C.

In simple words, this section encourages taxpayers to build a retirement corpus while reducing their tax burden. The best part? Both government and non-government employees can claim this benefit.

2. Importance of Section 80CCD(1B) in Tax Planning

When we talk about tax planning, many people stop at Section 80C. However, Section 80CCD(1B) goes a step further. By investing in NPS under this section, you can not only save more taxes but also secure your future financially.

Think of it like adding an extra layer of protection to your tax-saving armour—every bit helps, especially in the long run.

3. Eligibility Criteria under Section 80CCD(1B)

To claim benefits under Section 80CCD(1B):

• You must be an individual taxpayer (resident or non-resident).
• You must have contributed to the National Pension System (NPS).
• The contribution should be made from your own income.

This section is not available to Hindu Undivided Families (HUFs), ensuring that the benefit remains personal to the investor.

4. Maximum Deduction Limit under Section 80CCD(1B)

The maximum deduction available under this section is ₹50,000. This is over and above the ₹1.5 lakh limit of Section 80C.

So, if you fully utilise both, your total tax deduction can reach ₹2,00,000. Isn’t that a smart move for a taxpayer?

5. Difference between Section 80CCD(1) and 80CCD(1B)

Particulars	Section 80CCD(1)	Section 80CCD(1B)
Applicability	Employees and self-employed	Individuals contributing to NPS
Deduction Limit	Up to ₹1.5 lakh	Additional ₹50,000
Included under Section 80C	Yes	No, separate benefit
Objective	Promote retirement savings	Encourage extra investment in NPS

This clear distinction makes 80CCD(1B) a bonus opportunity for extra savings.

6. NPS – The Backbone of Section 80CCD(1B)

The National Pension System (NPS) is a government-backed retirement savings scheme. It allows individuals to invest regularly in a mix of equity, corporate bonds, and government securities.

Under Section 80CCD(1B), any voluntary contribution to NPS qualifies for the additional ₹50,000 deduction.

You can think of NPS as a long-term bridge to your retirement goals—strong, steady, and reliable.

7. Benefits of Investing in NPS for Salaried Employees

There are several advantages to investing in NPS:

• Tax Efficiency: Additional ₹50,000 deduction under 80CCD(1B).
• Flexible Contributions: You can invest any amount anytime.
• Market-Linked Growth: Earn better returns over time.
• Retirement Security: Build a pension corpus for post-retirement life.

With these benefits, NPS becomes a must-have investment option for every salary earner.

8. How to Claim Deduction under Section 80CCD(1B)

Claiming this deduction is simple:

1. Open an NPS Account (Tier I).
2. Contribute to your account using net banking, UPI, or offline mode.
3. Collect the contribution receipt from your NPS portal.
4. Declare the investment under Section 80CCD(1B) in your income tax return (ITR).

And that’s it! You can now enjoy your tax savings with confidence.

9. Step-by-Step Example of Tax Savings

Let’s take an example:
Mr. Raj, a non-government employee, invests ₹1,50,000 under Section 80C and ₹50,000 in NPS under Section 80CCD(1B).

Total Deduction = ₹2,00,000.
If his income falls under the 30% tax bracket, he saves ₹15,000 in taxes just by using Section 80CCD(1B).

That’s like getting paid for planning smartly!

 Download Automatic Income Tax Preparation Software All-in-One in Excel (F.Y. 2025–26) for Government and Non-Government Employees

Know your Tax Burden in the Old and New Tax Regime for the F.Y.2025-26 with Tax Calculator in Excel[/caption][caption id="attachment_6243" align="alignnone" width="745"] Know your Tax Burden in the Old and New Tax Regime for the F.Y.2025-26 with Tax Calculator in Excel[/caption][caption id="attachment_6224" align="alignnone" width="1011"] Section 80CCD(1B) | With Automatic Income Tax Preparation Software/Calculator All in One for the Government and Non-Government Employees for F.Y. 2025-26[/caption][caption id="attachment_6208" align="alignnone" width="1026"] Section 80CCD(1B) | With Automatic Income Tax Preparation Software/Calculator All in One for the Government and Non-Government Employees for F.Y. 2025-26[/caption]

Key Features of the Excel-Based Tax Preparation Utility

1. Dual Regime Option

You can easily select either the New or Old Tax Regime under Section 115BAC. Moreover, the software instantly compares both regimes and highlights which one saves you more tax. Furthermore, it empowers you to make smarter financial decisions with just one click.

2. Customised Salary Structure

The software automatically adapts to your specific salary format, whether you work for a Government or Non-Government organisation. Additionally, it customises your inputs to minimise manual entries and reduce human errors. Besides, this automation saves valuable time and ensures consistent accuracy across every calculation.

3. Automatic Arrears Relief Calculator [Section 89(1) + Form 10E]

The utility precisely calculates arrears relief for all financial years from 2000–01 to 2025–26. In addition, it automatically generates Form 10E for direct submission, eliminating the need for complex manual entries. Consequently, you can enjoy accurate and hassle-free tax relief computations every time.

4. Updated Form 16 (Part A & B)

The software automatically prepares the Revised Form 16 (Part A & B) for the Financial Year 2025–26. Likewise, it ensures that your Form 16 remains fully compliant with the latest tax rules and formats. Therefore, you can confidently submit your documents without worrying about compliance errors.

5. Simplified Compliance

The tool performs quick and error-free tax calculations using advanced built-in formulas. Furthermore, it removes the need for manual corrections, which enhances both accuracy and efficiency. Finally, you can prepare and finalise your income tax return with complete confidence and speed.

11. Features of the All-in-One Excel-Based Calculator

Here’s what makes this tool stand out:

• Covers All Deductions: Including Section 80C, 80D, 80CCD(1B), etc.
• Automatic Tax Calculation: Based on current income tax slabs.
• Form 10E Integration: Helps in arrears and relief calculations.
• Separate Sheets: For government and private employees.
• Printable Reports: Generate Form 16 and summary sheets easily.

In short, this Excel-based software is a one-stop solution for salaried taxpayers.

12. How to Use the Excel-Based Calculator

Using the calculator is as simple as 1-2-3:

1. Download the Excel file. From the above link
2. Enter your salary details, deductions, and investments.
3. Get your automatic computation with total tax payable and savings.

It’s almost like having your personal tax assistant inside Excel!

13. Benefits for Government Employees

For government employees, this software is especially useful. It includes:

• Updated HRA and DA calculations.
• Form 10E for relief on arrears.
• Easy comparison between old and new tax regimes.

This means you can make the best decision about which regime suits your income better.

14. Benefits for Non-Government Employees

Non-government employees can also enjoy several advantages:

• Auto-calculation of PF, NPS, and Professional Tax.
• Support for both monthly and annual salary structures.
• Customizable deductions for accurate results.

It ensures that private sector professionals save time, money, and stress.

15. Final Thoughts and Conclusion

In today’s fast-paced world, smart tax planning is essential. Section 80CCD(1B) empowers you to save more while securing your future through NPS. And with the help of the Automatic Income Tax Preparation Software/Calculator, managing taxes becomes effortless and precise.

Remember, every rupee saved in taxes is a step closer to financial freedom. So, why not make the most of it today?

Frequently Asked Questions (FAQs)

1. What is Section 80CCD(1B) under the Income Tax Act?
   Section 80CCD(1B) allows an additional tax deduction of ₹50,000 for contributions made to the National Pension System (NPS).
2. Who can claim deduction under Section 80CCD(1B)?
   Any individual taxpayer, whether a government or private employee, can claim this deduction by contributing to NPS.
3. Is Section 80CCD(1B) part of Section 80C?
   No, it’s an additional deduction over and above the ₹1.5 lakh limit under Section 80C.
4. How can I claim the deduction in my ITR?
   You must provide your NPS contribution details under Section 80CCD(1B) in your Income Tax Return form.
5. Can I use the Automatic Income Tax Calculator to compute my total savings?
   Yes! The Excel-based calculator automatically includes deductions under Section 80CCD(1B) and shows your net taxable income.

Why Choose the Automatic Income Tax Preparation Software All-in-One in Excel?

You should choose this Automatic Income Tax Preparation Software because it makes tax computation simple, accurate, and time-saving. Moreover, it’s specifically designed for Government and Non-Government employees for the Financial Year 2025–26, ensuring full compatibility with the latest tax rules. Furthermore, it minimises manual work while maximising precision, which helps you file your income tax returns effortlessly.

Additionally, this Excel-based utility provides built-in formulas, automatic comparisons, and real-time updates, making it a perfect tool for anyone who wants to save time and stay compliant. Therefore, whether you are a salaried government official or a private sector employee, you can confidently rely on this calculator to handle all your tax needs.

Comprehensive Coverage for Both Old and New Tax Regimes

This All-in-One Excel Calculator supports both the Old and New Tax Regimes under Section 115BAC. Moreover, the software allows you to switch between the two instantly and see which one gives you the highest savings. In addition, it performs an in-depth comparison, showing detailed calculations for both regimes side by side.

Consequently, you can make an informed decision based on your income, deductions, and personal financial goals. Likewise, it ensures you never miss out on any potential tax benefit. Besides, the calculator follows the latest Income Tax Slabs for F.Y. 2025–26, ensuring every computation remains fully up-to-date.

Time-Saving Automation and Accuracy

Unlike manual calculations that often lead to confusion or errors, this Excel-based software performs every step automatically. Furthermore, it updates every figure as soon as you input your salary and deductions. Consequently, the process becomes faster, smoother, and completely error-free.

Additionally, because the software is built with verified tax formulas, you can trust the accuracy of its results. Moreover, you can print detailed tax reports, saving valuable time during documentation and submission. Therefore, this automation not only enhances your tax preparation but also reduces the stress of last-minute filing.

Automatic Relief Calculation under Section 89(1) and Form 10E

The software also includes a powerful Automatic Arrears Relief Calculator under Section 89(1) with integrated Form 10E. Moreover, it helps you calculate arrear relief for salary differences from the F.Y. 2000–01 to 2025–26. In addition, the system automatically generates Form 10E, which you can directly attach to your income tax return.

Consequently, this feature ensures that your arrear-related tax relief is accurate and legally compliant. Likewise, it prevents overpayment or underpayment of taxes due to arrears, thereby protecting your financial interests.

Upgraded Form 16 Generation (Part A & B) And Part B

The Automatic Income Tax Preparation Software instantly generates Form 16 (Part A & B) and Part B in line with the latest tax norms. Moreover, it ensures that every entry, such as gross salary, deductions, and taxable income, is placed in the correct format. Additionally, you can print or share this Form 16 directly for submission.

Likewise, this saves both time and effort while ensuring that all your records stay in perfect order. Therefore, government and non-government employees can depend on it for precise and professional documentation.

Smart Compliance with Zero Manual Errors

In today’s fast-paced environment, accuracy and compliance are critical. Consequently, the All-in-One Excel Tax Calculator ensures that your income tax computations are quick, accurate, and compliant with government regulations. Moreover, advanced inbuilt formulas automatically detect errors, helping you maintain accuracy without extra effort.

Additionally, you can review every calculation in real-time, ensuring full transparency and control. Therefore, the risk of manual error becomes almost zero, which enhances both efficiency and confidence in your tax filing process.

Compatibility and Ease of Use

You don’t need to be a tax expert or Excel professional to use this software. Furthermore, the user-friendly design makes it suitable for everyone, from entry-level employees to senior officers. Additionally, the tool works seamlessly on most versions of Microsoft Excel, ensuring smooth performance without additional installations.

Besides, it requires minimal system resources, so you can run it easily on your desktop or laptop. Consequently, it becomes a convenient and accessible solution for every taxpayer. Moreover, you can save multiple versions of your calculations and revisit them whenever necessary.

Benefits for Government Employees

Government employees enjoy specific advantages while using this tool. Moreover, it includes built-in fields for HRA, DA, and TA calculations, making it extremely useful for central and state government staff. In addition, it provides Form 10E and arrear relief options that align with government salary structures.

Furthermore, it allows you to compare the old and new tax regimes, so you can select the one that maximises your take-home income. Therefore, government employees can easily calculate their taxes without needing professional help.

Benefits for Non-Government Employees

Private-sector professionals can also gain significant benefits. Moreover, the calculator supports diverse pay structures, including monthly and annual formats. Additionally, it helps compute deductions like EPF, Professional Tax, and NPS contributions automatically.

Furthermore, it generates clear reports that you can share with your HR or accounting department. Consequently, it saves both time and money by eliminating the need for manual verification or expensive software. Therefore, this tool becomes an ideal companion for non-government employees who want efficiency and accuracy in one place.

Conclusion

In conclusion, the Automatic Income Tax Preparation Software All-in-One in Excel for F.Y. 2025–26 is an essential tool for every salaried individual. Moreover, it simplifies the complex process of tax computation and ensures full compliance with Indian tax laws. Additionally, its intelligent automation, dual-regime comparison, and arrear relief calculation make it one of the most reliable tax utilities available.

Therefore, whether you are a Government or Non-Government employee, you can confidently download and use this tool to prepare your taxes quickly and accurately. Furthermore, its real-time accuracy and ease of use ensure that you never miss a deduction or make an error again. Finally, it’s more than just a calculator—it’s your personal tax assistant for a stress-free financial year.

On October 30, 2025 by www.taxexcel.net

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Budget 2025 has completely reshaped the Income Tax Act, 1961. From 1st April 2025, every salaried employee, business owner, and investor will experience the impact of these reforms. Think of this like updating your smartphone’s operating system: just as updates remove glitches and add new features, these tax changes aim to simplify compliance, cut red tape, and boost savings.

In this article, I will walk you through every Income Tax Change from 1st April 2025, explain their impact, and show you how you can plan smarter. Moreover, I will also introduce you to a powerful Automatic Income Tax Preparation Software in Excel, specially designed for both government and non-government employees.

Table of Contents

Sr#	Headings
1	New Income Tax Slabs for FY 2025-26
2	Comparison with Previous Year Slabs
3	Increased Rebate Under Section 87A
4	Enhanced TDS Thresholds
5	Changes in Tax Collected at Source (TCS)
6	Extended Timeline for Updated Tax Returns
7	Incentives for IFSC Units
8	Tax Exemptions for Start-ups
9	Removal of Section 206AB and 206CCA
10	Deduction on Partner Remuneration
11	ULIPs to be Taxed as Capital Gains
12	Relaxation in the Deemed Let-Out Property Provision
13	Removal of Equalisation Levy
14	How These Changes Affect Individual Taxpayers
15	Key Takeaways for FY 2025-26

1. New Income Tax Slabs for FY 2025-26

The government introduced fresh tax slabs under the new default regime (Section 115BAC). By doing so, it encouraged individuals to save more while also increasing their disposable income.

Revised Slabs for FY 2025-26 (AY 2026-27):

• Up to ₹4,00,000 → Nil
• ₹4,00,001 – ₹8,00,000 → 5%
• ₹8,00,001 – ₹12,00,000 → 10%
• ₹12,00,001 – ₹16,00,000 → 15%
• ₹16,00,001 – ₹20,00,000 → 20%
• ₹20,00,001 – ₹24,00,000 → 25%
• Above ₹24,00,000 → 30%

Importantly, the Old Tax Regime continues unchanged but remains optional.

2. Comparison with Previous Year Slabs

When compared with FY 2024-25, the new slabs are wider and more taxpayer-friendly. For instance, the exemption limit now rises from ₹3 lakh to ₹4 lakh, offering relief to millions of middle-class earners.

This restructuring gradually expands each slab, thereby giving more breathing room to taxpayers across income levels.

3. Increased Rebate Under Section 87A

The rebate u/s 87A has been significantly enhanced:

• Earlier: ₹25,000 rebate (tax-free income up to ₹7 lakh).
• Now: ₹60,000 rebate (tax-free income up to ₹12 lakh under the new regime).

As a result, taxpayers earning up to ₹12 lakh will now pay zero tax.

4. Enhanced TDS Thresholds

The government raised several TDS thresholds to reduce unnecessary deductions and ease compliance. For example:

• Senior citizens’ interest income: ₹50,000 → ₹1,00,000
• Rent: ₹2,40,000 annually → ₹50,000 monthly
• Professional fees: ₹30,000 → ₹50,000
• Commission/Brokerage: ₹15,000 → ₹20,000

Clearly, freelancers, consultants, and small taxpayers will gain the most from this move.

5. Changes in Tax Collected at Source (TCS)

Two significant reforms reshaped TCS provisions:

1. Overseas Remittances under LRS – Threshold increased from ₹7 lakh to ₹10 lakh. Plus, no TCS applies to education loans.
2. Abolition of Section 206C(1H) – TCS on goods worth over ₹50 lakh has been scrapped.

Together, these steps remove compliance pressure on individuals and businesses engaged in global transactions.

6. Extended Timeline for Updated Tax Returns

Now, you can file an Updated Return (ITR-U) within 48 months (4 years) from the end of the assessment year.

However, you must pay additional tax depending on the delay:

• Within 12 months → 25% extra
• Within 24 months → 50% extra
• Within 36 months → 60% extra
• Within 48 months → 70% extra

This extension provides more flexibility for voluntary disclosures.

7. Incentives for IFSC Units

The government extended tax concessions for IFSC units until 31 March 2030. In addition, life insurance bought from IFSC offices by NRIs enjoys complete exemption under Section 10(10D).

This strengthens India’s global financial hub ambitions.

8. Tax Exemptions for Start-ups

Start-ups incorporated before 1st April 2030 can now enjoy 100% tax deductions for 3 out of 10 years under Section 80-IAC.

Consequently, entrepreneurs gain more breathing space to reinvest profits into their businesses.

9. Removal of Section 206AB and 206CCA

Earlier, businesses had to verify whether the recipient filed an ITR before deducting tax. From April 2025, these sections will be removed, thereby cutting compliance burden for both taxpayers and businesses.

10. Deduction on Partner Remuneration

Partnership firms and LLPs can now claim higher deductions:

• First ₹6,00,000 profit → Higher of ₹3,00,000 or 90%
• Balance → 60% of profit

This ensures partners receive fairer remuneration benefits.

11. ULIPs to be Taxed as Capital Gains

If annual premiums exceed ₹2.5 lakh or 10% of the sum assured, ULIP proceeds will be taxed as capital gains.

• STCG → 20%
• LTCG → 12.5%

If premiums remain below the threshold, exemptions under Section 10(10D) still apply.

12. Relaxation in Deemed Let-Out Property Provision

Previously, you could treat two homes as self-occupied (with NIL annual value) only if relocation was forced. Now, from April 2025, you can declare any two houses as self-occupied regardless of the reason.

13. Removal of Equalisation Levy

The 6% levy on digital ad payments to foreign service providers is removed from April 2025. This reduces costs for Indian companies relying on global platforms.

14. How These Changes Affect Individual Taxpayers

• Middle-class earners → Save more with wider slabs and higher rebates.
• Senior citizens → Earn higher tax-free interest.
• Property owners → Enjoy flexibility in self-occupied property rules.
• Investors → Need to reassess ULIPs.
• Businesses → Benefit from reduced TDS/TCS compliance.

15. Key Takeaways for FY 2025-26

• New tax regime slabs = fairer, progressive system.
• Rebate under Section 87A = zero tax up to ₹12 lakh.
• TDS/TCS compliance burden reduced.
• Start-ups and IFSC units get longer tax holidays.
• Revisions in property, ULIP, and partner remuneration rules provide equity.

Conclusion

The Income Tax Changes from 1st April 2025 reflect a bold step toward simplification. While the government aims to balance revenue collection with taxpayer relief, the real benefits will depend on how individuals and businesses adapt.

Think of these reforms as a smoother operating system update: fewer bugs, better performance, and more transparency. Whether you’re salaried, self-employed, or a business owner, you now have a clearer and more flexible tax framework to plan your finances.

Frequently Asked Questions (FAQs)

1. What are the major Income Tax Changes from 1st April 2025?
   Key changes include revised slabs, higher rebate under Section 87A, enhanced TDS/TCS thresholds, an extended timeline for updated returns, and tax reliefs for start-ups and IFSC units.
2. Is income up to ₹12 lakh tax-free from FY 2025-26?
   Yes, under the new tax regime, income up to ₹12 lakh is tax-free due to the enhanced rebate.
3. Do I still need to file ITR if my income is below ₹12 lakh?
   Yes. Filing ITR remains mandatory if your income crosses the basic exemption limit, even if tax liability is nil.
4. What happens to ULIPs after April 2025?
   ULIPs with annual premiums above ₹2.5 lakh or 10% of the sum assured will be taxed as capital gains.
5. Are the old tax regime slabs still available?
   Yes, the old regime continues unchanged but remains optional.

Download Automatic Income Tax Preparation Software All in One in Excel for the Government and Non-Government Employees (F.Y. 2025-26)

    

• ✅ Prepares your Tax Computed Sheet as per Budget 2025
• ✅ Inbuilt salary structure for both Govt & Non-Govt Employees
• ✅ Automatic Salary Sheet
• ✅ Automatic calculation of HRA Exemption u/s 10(13A)
• ✅ Automatic Income Tax Arrears Relief Calculation u/s 89(1) with Form 10E
• ✅ Automatic Form 16 Part A and B
• ✅ Automatic Form 16 Part B

On September 15, 2025 by www.taxexcel.net

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Introduction

The Union Budget 2025 brought significant tax changes that directly impact salaried individuals, government employees, and non-government employees alike. Many taxpayers are now asking: Which regime is better—the Old or the New Tax Regime?

As per the Budget 2025, the New Tax Regime is more beneficial than the Old Tax Regime for a majority of taxpayers. Why? Because under this new structure, income up to ₹12.5 lakh can be exempted effectively with rebates and deductions, while earlier the benefits were limited. Interestingly, the New Tax Regime allows full exemption up to ₹7 lakh without paying any tax, and after ₹7 lakh, the tax calculation begins with lower slab rates compared to the Old Regime.

Think of it like shopping in a supermarket. In the Old Regime, you had many discount coupons (deductions), but you had to keep track of them carefully. In the New Regime, you walk in, and most items are already at a lower price—simple, direct, and beneficial.

This article will explain the benefits of the Old and New Tax Regime as per Budget 2025, compare them, and show how you can simplify your tax filing with Automatic Income Tax Preparation Software All in One in Excel for F.Y. 2025-26.

Table of Contents

Sr#	Headings
1	Understanding the Old Tax Regime
2	Understanding the New Tax Regime
3	Key Announcements in Budget 2025
4	Benefits of the Old and New Tax Regime as per Budget 2025
5	Why the New Tax Regime Is Considered More Beneficial
6	Tax Exemption Up to ₹7 Lakh Explained
7	Effective Exemption Up to ₹12.5 Lakh in the New Regime
8	Comparison of Tax Slabs: Old vs New
9	Impact on Government Employees
10	Impact on Non-Government Employees
11	Role of Standard Deduction in Both Regimes
12	Automatic Income Tax Preparation Software All-in-One in Excel
13	How Software Simplifies Tax Filing
14	Common Mistakes Taxpayers Make While Choosing a Regime
15	Final Verdict: Which Regime Should You Choose?
16	Conclusion
17	FAQs

1. Understanding the Old Tax Regime

The Old Tax Regime was known for its multiple deductions and exemptions. Taxpayers could claim benefits under Section 80C, 80D, HRA, LTA, home loan interest deductions, and more. This regime rewarded those who invested in tax-saving instruments like PPF, ELSS, insurance policies, and NPS.

However, the downside was its complexity. Taxpayers had to plan investments carefully to save tax. Many found it overwhelming to keep track of different proofs, receipts, and deadlines.

2. Understanding the New Tax Regime

The New Tax Regime was introduced to simplify taxation. Instead of relying on deductions, it offers lower tax rates with fewer compliance requirements.

• Up to ₹7 lakh of income is tax-free.
• The effective benefit can go up to ₹12.5 lakh under the Budget 2025 provisions.
• Fewer deductions, but straightforward and transparent slab rates.

This makes it especially attractive to young professionals, freelancers, and salaried employees who do not want to lock their money in long-term tax-saving instruments.

3. Key Announcements in Budget 2025

The Budget 2025 highlighted a clear preference for the New Tax Regime:

• Standard Deduction of ₹75,000 is available.
• Tax rebate up to ₹7 lakh under Section 87A.
• Effective tax exemption up to ₹12.5 lakh with deductions like NPS and employer contributions.
• Focus on simplifying tax filing for both government and non-government employees.

4. Benefits of the Old and New Tax Regime as per Budget 2025

Both regimes have advantages depending on the taxpayer’s profile:

• Old Regime Benefits: High deductions if you invest in tax-saving instruments. Useful for those with home loans or large medical insurance premiums.
• New Regime Benefits: Simpler structure, less paperwork, and higher effective exemption. Great for people who prefer liquidity over locking funds.

5. Why the New Tax Regime Is Considered More Beneficial

The New Tax Regime wins because:

• Income up to ₹12.5 lakh can be non-taxable with rebates.
• You don’t need to chase multiple deductions.
• Salaried people with fewer investments save more.

In short, it saves both time and money while reducing stress.

6. Tax Exemption Up to ₹7 Lakh Explained

Under Section 87A, if your taxable income does not exceed ₹7 lakh, you pay zero tax under the New Regime. This makes it especially beneficial for middle-class taxpayers.

7. Effective Exemption Up to ₹12.5 Lakh in New Regime

With the standard deduction and employer contributions towards NPS, taxpayers can stretch their tax-free income limit up to ₹12.5 lakh. This is the biggest attraction of Budget 2025 for salaried individuals.

8. Comparison of Tax Slabs: Old vs New

• Old Regime: Higher slab rates but multiple deductions.
• New Regime: Lower slab rates, fewer deductions, more direct benefit.

This comparison shows why many are shifting toward the new system.

9. Impact on Government Employees

Government employees often enjoyed allowances under the Old Regime. However, Budget 2025 ensures that even government staff find better savings under the New Regime with standard deduction and NPS contributions.

10. Impact on Non-Government Employees

Private-sector employees benefit the most since many do not claim multiple deductions. The New Regime provides a clean, hassle-free approach with higher exemptions.

11. Role of Standard Deduction in Both Regimes

The standard deduction of ₹75,000 is available under both regimes. This levels the playing field and ensures every salaried person gets a direct benefit without extra paperwork.

12. Automatic Income Tax Preparation Software All-in-One in Excel

Manual calculations can be confusing. The Automatic Income Tax Preparation Software All-in-One simplifies everything. It allows both government and non-government employees to:

• Enter income details.
• Choose between the Old and New Regimes.
• Automatically calculate tax liability.

13. How Software Simplifies Tax Filing

This Excel-based tool works like a personal tax assistant. It automatically generates tax sheets, Form 16, and even helps with Form 10E for arrears. Instead of worrying about mistakes, you can file your return with confidence.

14. Common Mistakes Taxpayers Make While Choosing a Regime

• Not comparing both regimes before filing.
• Overestimating deductions in the Old Regime.
• Forgetting that liquidity has value, money locked in tax-saving schemes reduces flexibility.

15. Final Verdict: Which Regime Should You Choose?

If you are someone who invests heavily in tax-saving schemes, the Old Regime may still suit you. But for most taxpayers, especially those earning up to ₹12.5 lakh, the New Tax Regime is more beneficial as per Budget 2025.

16. Conclusion

The Budget 2025 has tilted the scales in favour of the New Tax Regime. With simple slabs, higher exemptions, and reduced paperwork, it is truly a win for the general public.

Combine this with Automatic Income Tax Preparation Software All in One in Excel, and you have a stress-free way to calculate, plan, and file your taxes with confidence.

17. FAQs

Q1. What is the maximum tax-free income under the New Tax Regime in Budget 2025?
You can enjoy an effective exemption of up to ₹12.5 lakh under the New Regime.

Q2. Is the Old Tax Regime still available in F.Y. 2025-26?
Yes, taxpayers can still choose the Old Regime if it offers better benefits for them.

Q3. Who benefits most from the New Tax Regime?
Salaried individuals and non-government employees with fewer deductions benefit the most.

Q4. Do government employees gain under the New Tax Regime?
Yes, thanks to the standard deduction and NPS benefits, government employees also save more.

Q5. How does the Automatic Income Tax Preparation Software help taxpayers?
It simplifies tax filing by auto-calculating tax liability under both regimes and reducing errors.

Download the Automatic Income Tax Calculator All-in-One for Government and Non-Government Employees with Form 10E in Excel for F.Y. 2025-26

    

• This Excel-based calculator instantly prepares your Tax Computation Sheet as per the provisions of Budget 2025.
• Moreover, it includes an inbuilt salary structure for both Government and Non-Government employees, making it user-friendly.
• You can also rely on its Automatic Salary Sheet, which ensures accuracy without manual effort.
• In addition, it automatically calculates the HRA exemption under Section 10(13A) with just a few entries.
• It further simplifies your work by automatically computing Income Tax Arrears Relief under Section 89(1) along with Form 10E.
• As a bonus, the tool generates Form 16 Part A and Part B automatically, reducing paperwork.
• Finally, it provides an automatic Income Tax Form 16 Part B, making the filing process seamless and stress-free.

On September 12, 2025 by www.taxexcel.net

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Introduction

Are you earning up to ₹12.75 lakh annually and wondering which tax regime is best for you? You are not alone. With the Union Budget 2025 making a groundbreaking announcement, taxpayers are more curious than ever. Earlier, under the new income tax regime, individuals earning up to ₹7 lakh paid no taxes. Now, thanks to Finance Minister Nirmala Sitharaman, this limit has been raised to ₹12 lakh. And when you add the standard deduction of ₹75,000, the effective zero-tax threshold becomes ₹12.75 lakh.

This means, if your income is within that limit, you can save completely on taxes without worrying about exemptions or deductions. Sounds interesting, right? Let us dive deeper to understand why the new tax regime might be your best choice, especially compared to the old tax regime. Plus, we will show you how to calculate your tax burden for both regimes using an Excel utility designed for both Government and Non-Government employees.

Table of Contents

Sr#	Headings
1	Understanding the New Tax Regime in 2025
2	Key Highlights of Budget 2025 for Salaried Employees
3	What Does the ₹12.75 Lakh Threshold Mean for You?
4	Comparing the New and Old Tax Regimes
5	Why Middle-Class Families Benefit More Under the New Regime
6	Standard Deduction Explained Simply
7	Should You Switch if You Already Claimed Deductions?
8	Example Calculations: New Regime vs Old Regime
9	How the Excel Utility Helps Calculate Taxes Automatically
10	Features of the Automatic Income Tax Calculator
11	Tax Savings Without Complex Paperwork
12	Boosting Consumption and Savings with Lower Taxes
13	Common Misconceptions About the New Regime
14	Step-by-Step Guide to Using the Excel Utility
15	Conclusion and Final Thoughts

Understanding the New Tax Regime in 2025

The new tax regime, introduced in earlier budgets and enhanced in Budget 2025, focuses on simplicity and lower tax rates. Unlike the old regime, it offers fewer deductions but makes up for it with broader tax-free limits. Now, with income up to ₹12 lakh exempt and an additional ₹75,000 standard deduction, salaried individuals can effectively earn ₹12.75 lakh without paying a single rupee in taxes.

Key Highlights of Budget 2025 for Salaried Employees

The Finance Minister’s announcement was crystal clear: taxpayers earning up to ₹12 lakh need not pay any income tax under the new regime. Salaried individuals get an extra boost with the standard deduction. This announcement not only relieves middle-class taxpayers but also reduces paperwork since you do not need to track multiple exemptions and investment proofs.

What Does the ₹12.75 Lakh Threshold Mean for You?

Imagine earning ₹1,06,250 per month. Under the old tax regime, you would have had to carefully plan your investments in LIC, PPF, ELSS, HRA, and more to reduce your tax liability. Now, under the new system, you enjoy a zero-tax burden up to ₹12.75 lakh, even without those deductions.

This gives you flexibility—spend your money, save in your preferred way, or invest wherever you like, without being forced into tax-saving instruments.

Comparing the New and Old Tax Regimes

Let us compare:

• Old Regime: Multiple exemptions (HRA, 80C, 80D, etc.), higher compliance, mandatory investment planning.
• New Regime: Fewer exemptions, higher tax-free threshold, easier compliance, no need for proof submission.

Clearly, for those who do not have significant deductions, the new tax regime emerges as a smarter option.

Why Middle-Class Families Benefit More Under the New Regime

Middle-class taxpayers, often earning between ₹8–12 lakh, are the real winners. With zero taxes on ₹12.75 lakh, families can redirect funds towards children’s education, healthcare, home loans, or simply build better savings. In other words, it creates room for financial freedom without tying money in locked tax-saving instruments.

Standard Deduction Explained Simply

Think of the standard deduction like a universal discount coupon the government gives every salaried employee. No matter your salary, you instantly get ₹75,000 reduced from your taxable income under the new regime. This makes your effective tax-free threshold ₹12.75 lakh, not just ₹12 lakh.

Should You Switch if You Already Claimed Deductions?

If you actively invest in PPF, ELSS, NPS, and claim housing loan benefits, the old regime might still suit you. However, if you prefer flexibility and do not invest much in tax-saving products, the new regime with its simplified structure will save you more.

Example Calculations: New Regime vs Old Regime

Suppose your annual income is ₹12.5 lakh:

• Old Regime: After deductions, you may still have some tax liability.
• New Regime: With the standard deduction, your net taxable income falls under ₹12.75 lakh, leading to zero tax.

Thus, for many salaried employees, the new regime is tax-free without the effort of tax planning.

Download and Calculate Your Tax Burden for Both Regimes with This Excel Utility F.Y.2025-26

How the Excel Utility Helps Calculate Taxes Automatically

Confused about calculations? The Automatic Income Tax Calculator in Excel is your go-to solution. It compares the new and old tax regimes instantly and shows your exact tax liability in each case.

Features of the Automatic Income Tax Calculator

• Prepares your Tax Computed Sheet as per Budget 2025
• Inbuilt salary structure for both Govt and Non-Govt employees
• Automatic Salary Sheet generation
• HRA Exemption Calculation U/s 10(13A)
• Income Tax Arrears Relief Calculation U/s 89(1) with Form 10E
• Automatic Form 16 (Part A & B) preparation

Tax Savings without Complex Paperwork

Gone are the days of collecting dozens of investment proofs. With the new regime and the Excel utility, your tax filing becomes as smooth as driving on a newly paved highway—straightforward and hassle-free.

Boosting Consumption and Savings with Lower Taxes

When taxpayers retain more disposable income, they naturally spend more and save smarter. This creates a positive cycle, fueling both personal financial growth and the overall economy.

Common Misconceptions about the New Regime

1. “It is only for high-income earners” – Not true; it benefits middle-class taxpayers the most.
2. “No deductions at all” – Standard deduction of ₹75,000 still applies.
3. “Complicated to switch” – You can choose annually at the time of filing ITR.

Step-by-Step Guide to Using the Excel Utility

1. Download the utility.
2. Enter your basic salary details.
3. Select whether you are a Govt or Non-Govt employee.
4. View automatic comparison of new vs old tax regimes.
5. Generate reports like Form 16, Salary Sheet, and HRA calculations.

Conclusion and Final Thoughts

The new income tax regime in Budget 2025 is a game-changer. With a zero-tax threshold of ₹12.75 lakh, it offers simplicity, flexibility, and maximum relief for salaried taxpayers. By adopting this regime, you not only save taxes but also enjoy freedom from paperwork. And with the help of the Automatic Excel Tax Calculator, comparing regimes and filing returns becomes effortless.

So, if you earn up to ₹12.75 lakh, ask yourself: why pay taxes unnecessarily when the new regime gives you a tax-free path?

FAQs

1. Who should opt for the new tax regime in 2025?
   Salaried individuals earning up to ₹12.75 lakh without major deductions should opt for the new regime.
2. Can I switch between the new and old tax regimes every year?
   Yes, salaried taxpayers can choose their preferred regime every year while filing their ITR.
3. Does the new regime allow any deductions?
   Apart from the ₹75,000 standard deduction, most traditional deductions like 80C and HRA are not available.
4. How does the Excel utility help in tax filing?
   It automatically calculates tax liability under both regimes, prepares Form 16, salary sheets, and compares results for better decisions.
5. Is the new regime better for middle-class families?
   Yes, especially for those with incomes up to ₹12.75 lakh, as it ensures zero taxes and more disposable income.

Download Automatic Income Tax Calculator All in One for the Government and Non-Government Employees with Form 10E in Excel for the F.Y.2025-26

   

Features of this Excel Utility:-

+This Excel Calculator can prepare at a time your Tax Computed Sheet as per Budget 2025

+ Inbuilt Salary Structure for both of Govt and Non-Govt Employees

+ Automatic Salary Sheet

+ Automatic calculation of H.R.A. Exemption U/s 10(13A

+ Automatic calculate Income Tax Arrears Relief Calculation U/s 89(1) with Form 10E

+ Automatic Form 16 Part A and B

+ Automatic Income Tax Form 16 Part B

On September 11, 2025 by www.taxexcel.net

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Introduction

Are you considering the new tax regime but still Tax Regime it’s the right choice? You’re not alone. Many salaried individuals and professionals often feel stuck between the old and new tax regimes. It’s a lot like standing at a fork in the road—one path looks familiar but comes with twists and turns, while the other promises a smoother journey with fewer hurdles.

In this article, you’ll learn about five key benefits of opting for the new tax regime in F.Y.2025-26. Even better, you’ll also discover how an Automatic Income Tax Preparation Software All-in-One can help you calculate your liability quickly and accurately.

Let’s break it down step by step so you can make an informed decision with confidence.

Table of Contents

Sr#	Headings
1	What is the New Tax Regime?
2	Difference Between Old and New Tax Regime
3	Why the New Tax Regime is Becoming Popular
4	Benefit 1: Simplified Tax Structure
5	Benefit 2: Lower Tax Rates for Most Individuals
6	Benefit 3: No Need for Complicated Investment Proofs
7	Benefit 4: Transparency and Ease of Filing
8	Benefit 5: Flexibility in Choosing Regime
9	How Automatic Income Tax Preparation Software Helps You
10	Features of the All-in-One Software
11	Step-by-Step Guide to Checking Your Tax Liability
12	Who Should Opt for the New Tax Regime?
13	Common Mistakes to Avoid While Choosing a Regime
14	Expert Tips to Maximise Benefits
15	Final Thoughts

What is the New Tax Regime?

The new tax regime, introduced in recent Union Budgets, aims to simplify income tax calculations. Instead of juggling dozens of exemptions and deductions, you pay tax at reduced slab rates without worrying about investment proofs. This approach reduces paperwork and makes the process much smoother for the average taxpayer.

Difference Between Old and New Tax Regime

Under the old regime, taxpayers could claim exemptions such as HRA, LTA, and deductions under sections like 80C and 80D, among others. However, this often required careful planning and documentation.

In contrast, the new regime skips most deductions but offers lower tax rates across slabs. The trade-off? You decide whether the simplicity outweighs the loss of deductions.

Why the New Tax Regime is Becoming Popular

People are shifting toward the new tax regime for one main reason—convenience. No more chasing HR for proof submissions or worrying about last-minute investments just to save taxes. It’s straightforward, faster, and ideal for those who value time over tax-saving strategies.

Benefit 1: Simplified Tax Structure

With the new regime, you don’t need to memorise dozens of sections. Instead, you just look at your income slab and apply the corresponding rate. This is especially beneficial for young professionals who may not have significant investments yet.

Benefit 2: Lower Tax Rates for Most Individuals

The biggest attraction is lower tax rates. Many salaried employees with incomes under ₹15 lakhs may find themselves paying less tax compared to the old regime. This means more money in your pocket at the end of the year.

Benefit 3: No Need for Complicated Investment Proofs

Remember the rush in March to submit LIC premiums, PPF contributions, or ELSS investments? With the new regime, you can skip that headache. Your salary slip itself is enough to calculate taxes—no extra paperwork required.

Benefit 4: Transparency and Ease of Filing

The new system ensures transparency. Since calculations are simple, you can file your return quickly without worrying about mistakes or disallowances. This not only saves time but also reduces the risk of getting a tax notice.

Benefit 5: Flexibility in Choosing Regime

The government allows you to choose between the old and new regimes every year while filing your return (for salaried employees). This flexibility means you can evaluate your finances annually and switch if needed.

How Automatic Income Tax Preparation Software Helps You

Now comes the interesting part—how do you know which regime works better for you? Here’s where the Automatic Income Tax Preparation Software All-in-One steps in.

This tool lets you compare both regimes side by side. Within minutes, you can see your exact liability under each system and make the smarter choice.

Features of the All-in-One Software

• Automatic Calculation: No manual effort, just enter your salary details.
• Regime Comparison: Side-by-side view of old vs. new tax liability.
• Form 10E Support: Integrated support for arrears and relief calculation.
• User-Friendly Design: Works smoothly in Excel, no technical skills needed.
• Updated for F.Y.2025-26: Includes latest tax slabs and rules.

Step-by-Step Guide to Checking Your Tax Liability

1. Download the software in Excel.
2. Enter your salary, allowances, and deductions (if any).
3. Select your regime option.
4. Review the automatic calculation.
5. Compare old vs. new regime tax liability.
6. Decide which regime saves you more.

Who Should Opt for the New Tax Regime?

• Young professionals with fewer investments.
• Employees in private firms without HRA or LTA benefits.
• Freelancers and consultants who want straightforward tax filing.
• Anyone preferring simplicity over maximising deductions.

Common Mistakes to Avoid While Choosing a Regime

• Ignoring deductions you already have under the old regime.
• Not using a tax calculator or software for comparison.
• Switching without checking the actual difference in tax savings.

Expert Tips to Maximise Benefits

• Always compare both regimes before filing.
• Use the Automatic Income Tax Preparation Software for accuracy.
• Plan early instead of making last-minute decisions.
• Remember, you can switch regimes every year if you’re salaried.

Final Thoughts

Opting for the new tax regime in F.Y.2025-26 can be a game-changer for many taxpayers. With its simplified structure, lower rates, and flexibility, it brings relief to those tired of complex tax planning. Pair it with the Automatic Income Tax Preparation Software All-in-One, and you’ll have a stress-free, accurate, and efficient way to manage your taxes.

So, why complicate your tax life when you can simplify it today?

FAQs

1. Can I switch between the old and new tax regimes every year?
   Yes, salaried employees can switch annually while filing their ITR. Business professionals, however, have restrictions.
2. Will I lose all exemptions under the new tax regime?
   Most exemptions like HRA, LTA, and deductions under 80C are not available. However, you benefit from reduced slab rates.
3. Is the Automatic Income Tax Preparation Software free?
   Some versions may be free, while premium versions offer advanced features like Form 10E support.
4. Who benefits the most from the new tax regime?
   People without significant investments or exemptions usually benefit more due to the lower tax rates.
5. Do I still need to file income tax returns under the new regime?
   Yes, filing ITR is mandatory if your income exceeds the basic exemption limit, regardless of the regime you choose.

Download Automatic Income Tax Calculator All in One for the Government and Non-Government Employees with Form 10E in Excel for the F.Y.2025-26

   

Features of this Excel Utility are:-

+This Excel Calculator can prepare your Tax Computed Sheet as per Budget 2025

+ Inbuilt Salary Structure for both Govt and Non-Govt Employees

+ Automatic Salary Sheet

+ Automatic calculation of H.R.A. Exemption U/s 10(13A

+ Automatic calculate Income Tax Arrears Relief Calculation U/s 89(1) with Form 10E

+ Automatic Form 16 Part A and B

+ Automatic Income Tax Form 16 Part B

On September 09, 2025 by www.taxexcel.net

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