Introduction

The New Tax Regime, as per Budget 2025, has changed the way individuals calculate their income tax. It’s like switching from a complex multi-lane highway filled with toll booths (old regime) to a smoother, faster expressway (new regime) — but with fewer stops for deductions and exemptions.

If you’re wondering whether this new system benefits you, or how to calculate your tax under it, this guide walks you through everything — from eligibility and rates to deductions, exemptions, and practical examples.

Table of Contents

Sr#	Headings
1	Understanding the New Tax Regime as per Budget 2025
2	Key Features of the New Tax Regime
3	Tax Slabs and Rates under the New Regime
4	Who Should Opt for the New Tax Regime?
5	Standard Deduction in the New Tax Regime
6	Exemptions and Allowances Allowed
7	Deductions Not Available in the New Regime
8	How the New Regime Became the Default Option
9	Comparing Old vs New Tax Regime
10	How to Switch Between Tax Regimes
11	Filing Requirements and Form 10-IEA
12	Using Excel Tax Calculators for Easy Computation
13	Step-by-Step Example of Tax Calculation
14	Common Mistakes to Avoid
15	Final Thoughts on Choosing the Right Regime

1. Understanding the New Tax Regime as per Budget 2025

The Government of India introduced the new tax regime in the Union Budget 2020-21 and revised it in subsequent budgets, including the latest Budget 2025. It aims to simplify the tax system by offering lower tax rates but removing most deductions and exemptions.

Instead of claiming multiple allowances and investment-based deductions, you pay tax based mainly on your income slab. This straightforward approach saves time and paperwork.

2. Key Features of the New Tax Regime

Under the New Tax Regime, as per Budget 2025, the government has focused on simplicity and efficiency. Key features include:

• Lower tax rates compared to the old regime.
• Fewer exemptions and deductions to claim.
• Standard deduction increased to ₹75,000 for salaried employees and pensioners.
• Default regime from FY 2023-24 onwards, unless you opt for the old regime.
• No need to maintain a long list of proofs for deductions.

3. Tax Slabs and Rates under the New Regime

The latest Budget 2025 revised the tax slabs to make them more beneficial for middle-class taxpayers:

Annual Income (₹)	Tax Rate
Up to ₹3,00,000	Nil
₹3,00,001 – ₹6,00,000	5%
₹6,00,001 – ₹9,00,000	10%
₹9,00,001 – ₹12,00,000	15%
₹12,00,001 – ₹15,00,000	20%
Above ₹15,00,000	30%

These rates apply before cess and surcharge.

4. Who Should Opt for the New Tax Regime?

The New Tax Regime benefits taxpayers who:

• Do not claim high deductions under sections like 80C, 80D, or HRA.
• Prefer a hassle-free tax filing process.
• Have straightforward salary structures without multiple allowances.

If your total deductions under the old regime are less than ₹3,00,000, the new regime could be more tax-friendly.

5. Standard Deduction in the New Tax Regime

From FY 2025-26, the government increased the standard deduction to ₹75,000 for all salaried individuals and pensioners under the new regime.

This means you automatically reduce your taxable income by ₹75,000 — without submitting any proof or documentation.

6. Exemptions and Allowances Allowed

Although the new regime removed most exemptions, you can still enjoy certain benefits:

• Retirement Benefits: Gratuity and leave encashment at retirement remain tax-free.
• Employer Contributions: NPS and Provident Fund employer contributions are exempt.
• Agnipath Scheme (Section 80CCH) income exemption.
• Conveyance Allowance: Work-related travel allowances for those without employer-provided transport remain exempt.
• Allowance for Disabled Employees: Transport allowance for employees with disabilities is tax-free.

7. Deductions Not Available in the New Regime

You cannot claim the following in the new regime:

• Section 80C deductions (like LIC, PPF, ELSS).
• Section 80D deductions (health insurance premium).
• HRA exemption (except under certain special conditions).
• Education loan interest deduction (Section 80E).
• Savings bank interest exemption (Section 80TTA/TTB).

8. How the New Regime Became the Default Option

From FY 2023-24 onwards, the new tax regime automatically applies unless you opt for the old regime.

If you want to use the old regime, you must file Form 10-IEA before the income tax return due date.

9. Comparing Old vs New Tax Regime

Feature	Old Regime	New Regime
Tax Rates	Higher	Lower
Deductions	Many	Limited
Compliance	High paperwork	Minimal paperwork
Best For	High deduction claimers	Simple salary earners

10. How to Switch Between Tax Regimes

• Salaried employees can choose the regime every year while filing returns.
• Business owners can switch only once after choosing the new regime.

11. Filing Requirements and Form 10-IEA

To opt for the old regime, file Form 10-IEA online before your ITR due date. Without this, the department considers you under the new regime by default.

12. Using Excel Tax Calculators for Easy Computation

You can avoid manual calculations by using automated Excel tools like the Download Automatic Income Tax Calculator All in One for the Non-Government Employees in Excel for the F.Y.2025-26.

This Excel calculator includes:

• Tax computation sheet as per Budget 2025.
• Built-in salary structure for non-government employees.
• Automatic HRA exemption calculation.
• Auto-generated Form 12BA, Form 16 Part A & B.

13. Step-by-Step Example of Tax Calculation

Example: A salaried person earns ₹12,00,000 annually.

1. Gross Income: ₹12,00,000
2. Less Standard Deduction: ₹75,000
3. Taxable Income: ₹11,25,000

Tax:

• 0 – 3,00,000 → Nil
• 3,00,001 – 6,00,000 → ₹15,000 (5%)
• 6,00,001 – 9,00,000 → ₹30,000 (10%)
• 9,00,001 – 11,25,000 → ₹33,750 (15%)

Total Tax = ₹78,750 + Cess

14. Common Mistakes to Avoid

• Forgetting to file Form 10-IEA when opting for the old regime.
• Not checking tax savings under both regimes before deciding.
• Misreporting taxable income due to missed allowances.

15. Final Thoughts on Choosing the Right Regime

The New Tax Regime, as per Budget 2025, is ideal for those who value simplicity and don’t rely heavily on deductions. But the best choice depends on your personal financial situation — compare both before filing.

FAQs

1. What is the main benefit of the New Tax Regime as per the Budget 2025?
   It offers lower tax rates with simplified filing, reducing paperwork.
2. Can I claim Section 80C deductions in the new regime?
   No, Section 80C deductions are not available under the new regime.
3. Is the new regime mandatory for everyone?
   No, but it is the default. You can opt for the old regime by filing Form 10-IEA.
4. What is the standard deduction under the new regime for FY 2025-26?
   It is ₹75,000 for salaried individuals and pensioners.
5. Which tax regime saves more money?
   It depends on your income and deductions. Calculate both before deciding.

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

 

[This Excel Calculator can prepare your Tax Computed Sheet as per Budget 2025 + Inbuilt Salary Structure for both Non-Govt Employees + Automatic Salary Sheet + Automatic calculation of H.R.A. Exemption U/s 10(13A + Automatic Form 12BA Automatic Form 16 Part A and B + Automatic Income Tax Form 16 Part B]

  

On August 19, 2025 by www.taxexcel.net

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 Tax benefits on home loans for Co-owners. All joint owners can get tax benefits on a joint home loan 

if certain conditions are met. Let's take a look.

 

It is pertinent to note that ‘ownership of property is a prerequisite for receiving any tax benefit as opposed to property. You may have taken it jointly, but if you do not own the property - you cannot get tax benefits.

 

There are situations where the property is owned by one parent, and the parent and child together take out a loan that is only repaid by the child. In such cases, the child who is not a co-owner is deprived of the tax benefit on the home loan.

Terms of claiming property tax benefits

You may also, Like- Automated Income Tax Preparation Excel Based Software All in One for the Bihar State Govt Employees for the F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet with New and Old Tax Regime U/s 115 BAC + Individual Salary Statures as per the Bihar State Employees Salary Pattern + Automated H.R.A. Exemption Calculator U/s 10)13A) + Automated Income Tax Revised Form 16 Part A&B and Form 16 Part B]

You must be a co-owner of the property to be able to claim tax benefits for a home loan, you must be a property owner. In many cases, the loan is taken jointly, but the borrower does not own the property according to the documents. In such cases, you cannot claim tax benefits.

 

You must be a co-recipient for the loan. In addition to being an owner, you must be an applicant according to the loan documents. Owners who are not borrowers and do not contribute to EMI will be deprived of tax benefits.

 

The construction of the property must be completed - tax benefits on the property of a home can only be claimed, from the financial year that the construction of the property is completed. Tax benefits are not available for a property under construction. However, any costs prior to completion are claimed in five equal instalments from the year the construction is completed.

You may also, Like- Automated Income Tax Preparation Excel Based Software All in One for the Assam State Govt Employees for the F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet with New and Old Tax Regime U/s 115 BAC + Individual Salary Statures as per the Assam State Employees Salary Pattern + Automated H.R.A. Exemption Calculator U/s 10)13A) + Automated Income Tax Revised Form 16 Part A&B and Form 16 Part B]

 

What are the tax benefits?

 

Each co-owner, who is a co-applicant for the loan, may claim a tax benefit of Rs 2,00,000 U/s 24 B for home loan interest on their income tax return. The total interest paid on the loan is allocated to the owners in proportion to their ownership. Needless to say, the total interest claimed by the owner / or recipient cannot exceed the total interest paid for the loan.

 

For example, let's say Tatul and his wife bought a home on loan and paid Rs 4,50,000 in interest. They have a 50:50 equal share of the property. Ratul can claim Rs 2,00,000 in his tax return, his wife can also claim Rs 2,00,000.

 

For a rented property - In the budget of the year 201, the interest that can be claimed in the case of rented property is limited to the amount that the loss of property of such house is not more than Rs. 2 lakhs.

You may also, Like- Automated Income Tax Preparation Excel Based Software All in One for the Jharkhand StateGovt Employees for the F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet with New and Old Tax Regime U/s 115 BAC + Individual Salary Statures as per the Jharkhand State Employees Salary Pattern + Automated H.R.A. Exemption Calculator U/s 10)13A) + Automated Income Tax Revised Form 16 Part A&B and Form 16 Part B]

 

Each co-owner can claim a maximum rebate of Rs 1,50,000 for capital payment under section 80C. This is within the overall limit of Rs 1,50,000 under Section 80C.

 

Therefore, as a family, you will be able to take a larger tax benefit as opposed to the interest paid on a home loan when the property is jointly owned and your interest is more than Rs 2,00,000 per annum.

 

There may be a situation where you are paying the entire loan instalment and the co-borrower is not paying any money. In this case, you can claim full interest as a deduction on your income tax return.

 

Joint owners can also claim stamp duty and registration charges for a property. We have a detailed guide to help you maximize your tax benefits when you own a home.

You may also, Like- Automated Income Tax Preparation Excel Based Software All in One for the Non-Govt (Private) Employees for the F.Y.2021-22

Main Feature of this Excel Utility-

@ This Excel Utility can prepare at a time your Tax Computed Sheet with New and Old Tax Regime U/s 115 BAC

 

@ Individual Salary Statures as per the Non-Govt (Private) Employees Salary Pattern

 

@ Automated H.R.A. Exemption Calculator U/s 10)13A)

 

@ Automated Income Tax 12 BA

 

@ Automated Income Tax Revised Form 16 Part A&B and Form 16 Part B]

On August 16, 2021 by www.taxexcel.net

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Section 80C of Income Tax Act, 1961 discussions about findings of tax. The Section 80C straightforwardly lessens the taxable income due to the section 80C the tax obligation descends definitely. 

On August 18, 2020 by www.taxexcel.net

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Form 12ba is an explanation that insights about the perquisites and other incidental advantages alongside benefits in lieu of a worker's compensation. Perquisites, or advantages as they are called, are allowed to representatives for their administration.

On January 23, 2020 by www.taxexcel.net

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As per the Finance Budget 2019, some Important Income Tax Section and Income Tax Rebate has changed. The Major modification including the Income Tax Slab Rate for the F.Y. 2019-20 is given below.

On September 06, 2019 by www.taxexcel.net

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As per the Finance Budget 2019, some Important Income Tax Section and Income Tax Rebate has changed. The Major modification including the Income Tax Slab Rate for the F.Y. 2019-20 is given below.

On August 17, 2019 by www.taxexcel.net

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As per the Finance Budget 2019, some Important Income Tax Section and Income Tax Rebate have changed. The Major modification including the Income Tax Slab Rate for the F.Y. 2019-20 is given below.

On August 06, 2019 by www.taxexcel.net

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As per the Finance Budget 2019, some Important Income Tax Section and Income Tax Rebate have changed. The Major modification including the Income Tax Slab Rate for the F.Y. 2019-20 is given below.

On July 30, 2019 by www.taxexcel.net

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The CBDT has changed the format of Income Tax Form 16 Part B for the Financial Year 2018-19 since the 12 May  2019. This Format is more explore the employee’s Salary Details.

On June 21, 2019 by www.taxexcel.net

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Download Master of Form 16 Part B with Form 12 BA for the FY 2014-15 [ This Excel Utility can prepare at a time 50 employees Form 16 Part B with 12 BA]

Most of the taxpayers is known to that the Interest of NSC is Non Taxable or it may relief from Tax U/s 80 C, but as per the Income tax Rules the Interest of NSC is not entitled to any tax relief in any Income Tax Section and the Interest of NSC is Fully Taxable Income. If the Employees or Tax payers can re-invest as NSC then can get the benefits U/s 80C.

Deposits  up to Rs.1.5 lakh  in NSC qualify for Deduction Section 80C of the Income Tax Act. Accrued interest on NSC also qualify for deduction u/s. for first five years.

NSC interest is taxable. However, as it is a cumulative scheme (e.g. interest is not paid to the investor but instead accumulates in the account), each year’s interest for the first 5 years is considered reinvested in the NSC. Since it is deemed reinvested, it qualifies for a fresh deduction under Sec 80C, thereby making it tax-free. Only the final year’s interest, when the NSC matures, does not receive a tax deduction as it does not get reinvested, but is paid back to the investor along with the interest of the earlier years and the capital amount.

Five things to know about National Savings Certificate

1) The National Savings Certificate (NSC) is eligible for tax deduction under Section 80C for an investment of up to Rs 1 lakh. One can invest in five- or 10-year NSCs.

2) The interest on the NSC is fixed in April every year. The current rate is 8.5% for five years, and 8.8% for 10 years.

3) The interest accumulated every year can be deducted from Rs 1.5 lakh  invest in that year for saving tax, as it is considered to be invested for this purpose.

4) The interest is taxable, but since it can be reinvested as part of Section 80C investment, it makes NSC an attractive option.

5) Investors have to keep an account of the interest received each year and ensure that the overall investment, including the interest, is in the Rs 1.5 lakh limit.

On January 18, 2015 by www.taxexcel.net

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Automatic Master of Form 16 Part B with 12 BA for the Financial Year 2014-15 and Assessment Year 2015-16( Prepare at a time 50 employees Form 16 Part B with 12 BA)

Prepare at a time 50 employees Form 16 with 12 BA for the Ass Year 2014-15 by this one Excel Based Software. You can prepare more than 1000 employees Form 16 with 12 BA. First you can prepare 50 employees form 16 with 12 BA and Save the Same in another Name and Location. After Saved the 50 employees Form 16, prepare another 50 employees Form 16 with 12 BA and save the same as before.
                               Deductor Details Sheet

                            Tax Deduction Section Wise Sheet

                                       Form 16 Part B

                                     Form 12 BA

Main feature of this Excel utility:-

• It is most easy to prepare more than 1000 employees Form 16 with 12 BA by this One Software (Excel Based).
• Automatic Calculate the each employees Income Tax Liability
• Automatic Convert the Amount in to the in words without install any Add-ins or any Macro
• Easy to generate, as this Software based only on the Excel
• Prepare at a time 50 employees Form 16 Part B with 12 BA

Download Form 16 Part B with 12 BA for FY 2014-15

On December 06, 2014 by www.taxexcel.net

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