Finance Minister Nirmala Sitharaman confirmed no tax rate cuts for the old regime, despite taxpayer demands for equal reductions in both systems. At a News18 event, she clarified that the government isn’t forcing a switch to the new regime, noting that over 78% of taxpayers have already opted for it to simplify taxation and compliance.
The new regime offers lower tax rates and a higher standard deduction of Rs 75,000 to reduce the middle class’s tax burden, while the old regime’s rates stay the same. “We included the standard deduction in the new system after considering public feedback,” Sitharaman stated.
No changes have been made to the old tax regime rates
Despite improvements, some middle-class taxpayers believe the new system’s rate reductions should apply to the old regime as well. Sitharaman acknowledged these concerns but reiterated the government’s stance: “I understand the desire for similar reductions under the old regime, but the changes remain exclusive to the new scheme.”
The Finance Minister emphasized the government’s dedication to simplifying the tax system, especially for the middle class, with a focus on streamlining direct taxation. She noted that efforts to simplify the tax process have been underway since 2019. “This is why we introduced the new regime with lower rates, allowing taxpayers the choice to stay in the old scheme if they prefer exemptions,” she explained.
Initially, the new scheme lacked exemptions, but the government later added a standard deduction to meet taxpayers’ needs. “In the Union Budget presented in July, we revisited this issue, further reduced rates for the middle class, and increased the standard deduction,” Sitharaman noted.
Income tax rates under the new regime for FY25:-
Upto Rs 3 lakh — Nil
Rs 3 lakh to Rs 7 lakh — 5% (Tax rebate under section 87A up to Rs 7 lakh)
Rs 7 lakh to Rs 10 lakh — 10%
Rs 10 lakh to Rs 12 lakh — 15%
Rs 12 lakh to Rs 15 lakh — 20%
Above Rs 15 lakh — 30%
Income tax slabs under the old regime (below the age of 60 years):-
Upto Rs 2.5 lakh — Nil
Rs 2.5 lakh to Rs 5 lakh — 5%
Rs 5 lakh to Rs 10 lakh — 20%
Above Rs 10 lakh — 30%
Income tax slabs under the old regime (from age 60 to 80):-
Upto Rs 3 lakh — Nil
Rs 3 lakh to Rs 6 lakh — 5%
Rs 6 lakh to Rs 9 lakh — 10%
Rs 9 lakh to Rs 12 lakh — 15%
Rs 12 lakh to Rs 15 lakh — 20%
Above Rs 15 lakh — 30%
Income tax slabs under the old regime (above 80 years):-
Upto Rs 5 lakh — Nil
Rs 5 lakh to Rs 10 lakh — 20%
Above Rs 10 lakh — 30%