Old Tax Regime v/s New Tax Regime after Budget 2023

The new tax regime was the major highlight in the Budget 2023 by FM Nirmala Sitharaman.

The budget aimed to simplify the tax structure for the middle class. Under the new tax regime:

  • Income slabs were reduced
  • Standard deduction was introduced
  • Rebate limit increased

New Tax Regime was made the default regime. However, taxpayers can still opt for the old tax regime, which had seen no changes.

Simply stated, in the old regime, you pay tax after considering deductions u/s 80C for certain investments like mutual funds, EPF, PPF, etc., u/s 80D for medical insurance, and salaried individuals get a standard deduction and a benefit of house rent under HRA.

Talking about the new regime, you pay tax on income earned without any deductions.

Until the previous FY, it hasn’t been very popular because most people still paid less amount of taxes under the old regime as they could claim deductions. However, that does not mean you do not invest in your future securities.

Hence, to make the new regime attractive, the FM increased the rebate limit u/s 87A to 25,000 from 12,500 applicable from FY 2023-24. So, it’s a benefit to people who earn income up to ₹7 lakhs as their income will be completely tax-free, and also don’t have to worry about making investments or purchasing insurance to save taxes.

Many of you are trying to evaluate which of the two regimes is better and relevant to your income situation!

Let’s look at how the new tax regime is made more attractive as compared to the old regime.

Tax Rates: Old Regime & New Regime

Now that we have understood the differences, let’s try to understand the taxability under both regimes as per the Budget 2023-24.

Let’s say, Aman who is 25 years old has a gross total income of ₹12 lakhs as under:

Income from Salary = 8 lakhs

Income from House Property = 1 lakh

Income from Income Sources = 3 lakhs

  • Interest Income from FD = 2L
  • Interest Income from Savings Account = 1L

He is eligible for a deduction u/s 80C of ₹1,50,000 as he has invested the amount in PPF and a deduction u/s 80TTA of ₹10,000.

What should be the taxability for Aman?


So, from the above table we can observe that even after claiming deductions under the old regime, the tax liability under the new regime is lower.
Hence, the regime to be chosen should be after comparing the tax liability under both regimes.

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These year i will go for Old Tax Slab. since 80G & Other Stock Brokage Charges.
But for Next Year i want to OPT For New Tax Slab as it is Best.

But whatever My Loses in Short Term Capital Gain for these Year.
Can i carry forward STCG Loses in New Tax Slab.

Since these year i will use Old Tax Slab & Next Year i will Use New Tax Slab…

Hi @Aadil_Nakhwa,

Irrespective of any regime you’re opting for, you’re eligible to carry forward your short-term capital losses.

Hope this helps.


Is deduction upto Rs.10,000/- on savings account, applicable under Sec 80TTA, available under the new tax regime, be it AY 2023-24 or 2024-25?

Hi @gdshan,

As per the Income Tax Act, deduction on savings account interest under section 80TTA is only available in the old tax regime.

hence, if you opt for a new tax regime, you’re not eligible to claim such a deduction.

Hope it helps.


Thanks for clarifying.

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