The Old Tax Regime in India refers to the traditional system of personal income tax that offers various exemptions and deductions under the Income Tax Act, 1961. Under this system, taxpayers can reduce their taxable income by claiming deductions such as those under Section 80C (investments in LIC, PPF, ELSS, etc.), Section 80D (health insurance premiums), House Rent Allowance (HRA), Leave Travel Allowance (LTA), and more.
This regime is often preferred by salaried individuals, business owners, and professionals who make significant tax-saving investments or incur eligible expenses. It offers flexibility and tax relief for those who actively plan their finances through investments, insurance, housing loans, and other allowable deductions.
From a compliance perspective, those opting for the Old Tax Regime must carefully maintain supporting documents and ensure timely filings, especially while claiming deductions during income tax return (ITR) submission. This is important for both salaried and self-employed individuals to avoid discrepancies or notices from the tax department.
With the introduction of the New Tax Regime (also known as the concessional tax regime), taxpayers now have the option to choose between the two systems each financial year—whichever is more beneficial based on their income structure and eligible deductions.
To explore how the Old Tax Regime compares with the new system, or to get assistance with tax planning and ITR filing, you can visit FinTax24’s income tax solutions.
In summary, the Old Tax Regime remains a valuable choice for those who leverage deductions and prefer a personalized tax-saving strategy.