Who benefits from the new tax regime?

As per the Union Budget (AY2024-25) the new simplified tax regime can benefit taxpayers who have limited deductions and do not invest much in tax-saving schemes. If the total deductions, excluding the standard deduction, are less than Rs 1.5 Lakhs in a financial year, the new regime offers lower tax rates and, hence, greater savings.

Further, taxpayers who do not actively invest in common tax-saving instruments like PPF, ELSS, etc. and are unable to claim large deductions under 80C can opt for the new regime to reduce their total tax payable.

However, taxpayers who actively invest in 80C and take other deductions may find the old regime more beneficial. One should evaluate all scenarios before choosing the tax regime to maximise savings.