Old vs New Tax Regime 2025

Old vs New Tax Regime 2025: How to Choose & Switch

While filing income tax returns in 2025, taxpayers must choose between the Old and New Tax Regime. The default option is the New Regime unless the Old Regime is selected manually.

1. Key Difference

New Tax Regime
Lower tax rates but no major deductions. Simple and paperwork-free.
Old Tax Regime
Higher rates but allows deductions like HRA, insurance, and home loan benefits.

2. Switching Rules

Taxpayer Type Switching Allowed Remarks
Salaried Yes, every year Choice can be made at return filing stage
Business / Professional Limited Form 10-IEA mandatory

3. How to Switch

Salaried taxpayers can choose the regime while filing ITR. Business taxpayers must submit Form 10-IEA before filing.

4. Which Is Better?

Choose New Regime for simplicity and lower income. Choose Old Regime if you claim significant deductions.
Golden Rule: File your return on time to retain Old Regime benefits.