Old vs New Tax Regime: Which One Saves You More? Expert Advice from CA Nitesh Buddhadev

As each financial year begins, salaried individuals across India face a common dilemma—Should I opt for the old tax regime or the new one? The answer isn’t one-size-fits-all. Your income, deductions, and investments play a crucial role in determining which tax structure is more beneficial for you.

In a recent session hosted by Money9, renowned tax expert CA Nitesh Buddhadev breaks down the differences between the two regimes and offers clear guidance on how to make the best choice for your financial health.

Understanding the Basics: Old vs New Tax Regime

The New Tax Regime was introduced to simplify the tax structure by offering lower tax rates, but it comes with a trade-off—you have to forgo most deductions and exemptions.

On the other hand, the Old Tax Regime offers higher tax rates but allows taxpayers to claim benefits on investments, insurance, home loans, HRA, and more.

Here’s a quick comparison:

Criteria Old Tax Regime New Tax Regime

Tax Rates	Higher	Lower
Deductions (80C, 80D, etc.)	Available	Not Available
House Rent Allowance (HRA)	Can be claimed	Cannot be claimed
Suitable for	Individuals with high investments/deductions	Individuals with low or no deductions
Complexity	Moderate to High	Simple

Key Advice from CA Nitesh Buddhadev

According to CA Nitesh Buddhadev, there’s no universal answer to which regime is better. He recommends making a data-driven decision based on:

• Your gross income

• Eligible deductions under sections like:

  • 80C (Investments like PPF, ELSS, LIC, etc.)

  • 80D (Health insurance premium)

  • 24(b) (Home loan interest)

  • HRA (If you're paying rent)

• Total taxable income after deductions

He emphasizes using detailed tax calculators or consulting with a professional before locking in your choice for the year.

Who Should Choose What? ✅ Old Tax Regime is Ideal for You If:

• You invest regularly in tax-saving instruments

• You pay rent and can claim HRA

• You’re repaying a home loan

• Your deductions exceed ₹3–4 lakh annually

In this case, the tax savings from deductions can outweigh the lower tax rates offered by the new regime.

✅ New Tax Regime is Ideal for You If:

• You don’t claim many deductions

• Your income is moderate and you prefer a hassle-free filing process

• You’re a new professional or early-career employee

• You want a simplified structure without paperwork or proofs

Example Calculation

Let’s say your annual income is ₹10 lakh.

Under Old Regime:

• Deductions claimed: ₹2 lakh (80C + 80D + HRA)

• Taxable income: ₹8 lakh

• Approx. tax: ₹72,500 (after rebate)

Under New Regime:

• No deductions

• Taxable income: ₹10 lakh

• Approx. tax: ₹75,000 (after rebate)

Verdict: In this case, old regime saves you ₹2,500, and if your deductions are even higher, the savings multiply.

How to Choose the Right Tax Regime?

Here’s a simple step-by-step method:

Calculate your total deductions under the old regime.

Use any online tax comparison calculator (available on Income Tax or trusted financial websites).

Compare total tax payable under both regimes.

Select the regime that offers the lowest total tax outgo.

Remember, salaried employees can switch regimes every year when filing ITR. So, you can re-evaluate annually based on your income and deductions.

Final Thoughts

Choosing the right tax regime is not just about saving tax—it’s about smart financial planning. With expert insights from CA Nitesh Buddhadev and a clear understanding of your finances, you can make the most out of your salary and avoid unnecessary tax burden.

So, whether you’re a young professional or a seasoned employee with multiple investments, take the time to analyze, compare, and decide. Your pocket will thank you later!

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