Choosing between the old vs new tax regimes can have a significant impact on your take-home salary. The Government of India offers two tax regimes: the old regime with exemptions and deductions, and the new tax regime with reduced tax rates but no deductions. In this guide, we break down both regimes, provide income tax slab details for FY 2024-25, and include a tax calculator to help you decide which regime suits you best. Whether you’re a salaried professional, freelancer, or entrepreneur using tools like a business loan calculator, this article simplifies your tax planning in 2025.
Understanding the Two Tax Regimes
Before comparing the benefits, it’s important to understand the structural differences between the old tax regime and the new tax regime.
Old Tax Regime:
- Allows deductions under 80C, 80D, HRA, LTA, etc.
- Suitable for individuals who invest and claim multiple deductions
- Complex structure but offers savings for disciplined investors
New Tax Regime:
- Lower tax rates
- No deductions or exemptions allowed
- Simpler and cleaner for those who don’t invest in tax-saving instruments
Income Tax Slabs for FY 2024-25 (AY 2025-26)
New Tax Regime Slabs (Default in 2025)
| Annual Income Range (₹) | Tax Rate (%) |
| 0 – 3,00,000 | 0 |
| 3,00,001 – 6,00,000 | 5 |
| 6,00,001 – 9,00,000 | 10 |
| 9,00,001 – 12,00,000 | 15 |
| 12,00,001 – 15,00,000 | 20 |
| Above 15,00,000 | 30 |
Note: No standard deductions or 80C benefits apply under this regime.
Old Tax Regime Slabs
| Annual Income Range (₹) | Tax Rate (%) |
| 0 – 2,50,000 | 0 |
| 2,50,001 – 5,00,000 | 5 |
| 5,00,001 – 10,00,000 | 20 |
| Above 10,00,000 | 30 |
Deductions Allowed: 80C (₹1.5L), 80D, HRA, Standard Deduction (₹50,000), and others.
Tax Comparison Calculator: Old vs New Tax Regime
Use this simple method to compare tax liability under both regimes. The calculator uses your gross salary and deductions to estimate which regime offers better savings.
Inputs:
- Gross Annual Income
- Total Deductions (80C, 80D, HRA, etc.)
Example 1: With Deductions (Old Regime Advantage)
| Details | Amount (₹) |
| Gross Income | 10,00,000 |
| Deductions (80C, etc.) | 2,00,000 |
| Taxable Income (Old) | 8,00,000 |
| Tax (Old Regime) | ₹72,500 |
| Tax (New Regime) | ₹75,000 |
The Old Regime is better if deductions are over ₹2,00,000.
Example 2: With No Deductions (New Regime Advantage)
| Details | Amount (₹) |
| Gross Income | 8,00,000 |
| Deductions | 0 |
| Tax (Old Regime) | ₹72,500 |
| Tax (New Regime) | ₹45,000 |
The New Regime is better if you don’t claim any deductions.
Who Should Choose the New Tax Regime in 2025?
- Individuals with limited or no deductions
- Freelancers and gig workers with unpredictable incomes
- First-time earners or young professionals
- Salaried employees who prefer ease over tax planning
Even those using a user personal loan app or platforms like Olyv for short-term credit can benefit if they don’t claim deductions.
Who Should Opt for the Old Tax Regime?
- Salaried professionals with HRA, PF, and 80C investments
- Individuals with education loan interest or home loan benefits
- Families investing in health insurance, tuition, ELSS, and PPF
- Business owners using a business loan calculator and claiming depreciation, rent, etc.
How Your Loans Affect Tax Regime Choice
1. Personal Loan
- Interest is not tax-deductible unless used for business or asset purchase.
- Use a personal loan calculator to estimate outflows and budget accurately.
2. Vehicle Loan
- No tax deduction unless the vehicle is used for business.
- Calculate car loan EMI using Olyv’s vehicle loan EMI calculator for clarity.
3. Business Loan
- Interest paid on business loans is tax-deductible under the old tax regime.
- Plan repayments using Olyv’s business loan calculator to match tax planning.
Gold Loan Tax Consideration (Manual Calculation)
Though Olyv does not offer a gold loan calculator, you can use this manual EMI formula:
EMI Formula:
EMI=P×R×(1+R)N(1+R)N−1EMI = \frac{P \times R \times (1 + R)^N}{(1 + R)^N – 1}EMI=(1+R)N−1P×R×(1+R)N
- P = Loan Amount
- R = Monthly Interest Rate (Annual ÷ 12 ÷ 100)
- N = Loan Tenure (months)
Points to Consider During a Gold Loan:
- Purity of gold and weight pledged
- Interest rate offered (market average ~9–12% annually)
- Repayment frequency
- Processing charges and loan-to-value ratio
Tips to Choose Between the Tax Regimes in 2025
| Factor | Consider This |
| Total Annual Deductions | More than ₹2,50,000? Choose old regime |
| Simplicity | Prefer fewer documents? The new regime might suit you |
| Loan-Based Tax Deductions | Using a business loan or an education loan? The old regime preferred |
| Salary Structure | Includes HRA, LTA, allowances? Take advantage of the old regime |
| Financial Discipline | Invest regularly? Use the old regime for tax-saving instruments |
Final Thoughts
Choosing between the old vs new tax regimes in 2025 depends on your income structure, lifestyle, and how you manage your finances. Use the comparison calculator and understand your deductions before making a decision.
Also, be sure to use smart financial tools such as:
- A personal loan calculator to plan for short-term personal needs
- A business loan calculator to budget business expansions
- A vehicle loan EMI calculator to estimate monthly outflows on your new vehicle
If you’re using a trusted platform like Olyv, you also benefit from:
- Loan amounts ranging from ₹1,000 to ₹5,00,000
- Tenures ranging from 2 to 18 months, ideal for all tax planning periods
Stay informed, plan better, and choose the regime that supports your financial goals best in 2025.
