Can I switch regimes mid-year?

No. Choose at the start of the year and inform your employer for correct TDS. Final choice is made when filing ITR.

Does employer NPS contribution work in new regime?

Yes! Employer's NPS contribution up to 14% of basic (govt) or 10% (private) is deductible under both regimes — one of the few deductions surviving in new regime.

What about professional tax?

Professional tax is deductible in both regimes. It's a small amount (₹2,500 max) but every bit helps.

Old vs New Tax Regime for Salaried Employees

Salary-specific comparison of old and new tax regimes with HRA, 80C, and home loan analysis.

Criteria	Old Regime (Salaried)	New Regime (Salaried)
Standard Deduction	₹50,000	₹75,000
HRA Exemption	Available (rent-based)	Not available
80C Deduction	₹1.5L (EPF + PPF + ELSS etc)	Not available
80D (Health Insurance)	₹25K-₹1L	Not available
NPS 80CCD(2)	Available	Available (14% of basic for govt)
Leave Travel Allowance	Available	Not available

Our Verdict

For salaried employees paying rent in metro cities with home loan and full 80C investment, old regime typically saves ₹30K-₹80K more. For those with minimal deductions or CTC below ₹10L, new regime is simpler and often cheaper.

Detailed Analysis

Salaried employees have unique considerations when choosing between tax regimes.

Old regime benefits salaried employees who: pay rent (HRA exemption can be ₹1-3L for metro cities), have home loans (₹2L Section 24b), invest in 80C instruments (₹1.5L), and pay health insurance (₹25K-₹1L under 80D). Total deductions can easily cross ₹4-5L.

New regime is better for employees with company-provided accommodation (no HRA), no home loan, and minimal investments. The higher ₹75,000 standard deduction partially compensates, and simpler filing is a bonus.

Old vs New Tax Regime for Salaried Employees

Our Verdict

Detailed Analysis

Frequently Asked Questions

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