ITR Filing: Comparison Of Deductions Under Old And New Tax Regime For FY 2024-25

The new deadline for filing income tax returns for the financial year 2024-25 (assessment year 2025-26) has been extended till Sept. 15. To file ITRs, taxpayers will need to choose between the old and new tax regimes and submit their returns on time to avoid penalties.

The old regime allows for various deductions and exemptions, such as under Sections 80C, 80D and HRA, which can significantly reduce the taxable income and overall tax liability. The new regime offers lower tax rates, but fewer deductions. 

Deductions Under Old Tax Regime:

1. Taxpayers can claim deductions under Section 24(b) of a maximum of Rs 2 lakh deduction on home loan interest for self-occupied property.

2. Sections 80C, 80CCC, and 80CCD(1) (meant for pension, etc) offer a combined deduction limit of Rs 1,50,000.

3. Additionally, a maximum of Rs 50,000 can be claimed under Section 80CCD(1B) for contributions to the pension schemes offered by the Central government.

4. Under Section 80D, the tax department allows taxpayers to claim a deduction for health insurance premiums and preventive health check-ups. For self, spouse and dependent children, the limit is Rs 25,000. For parents, it's Rs 25,000. Preventive check-up limit is Rs 5,000 within these overall limits.

5. Under Section 80DDB, you can claim a deduction for medical treatment of self or dependents for specified diseases. The limit of up to Rs 40,000 for regular patients and up to Rs 1,00,000 for senior citizens.

6. Taxpayers can use the Section 80EE to claim a deduction of up to Rs 50,000 on interest paid for loans taken for eligible residential house property. This deduction is allowed over and above Section 24(b).

7. Section 80EEB allows a deduction of up to Rs 1,50,000 on interest paid for loans taken to purchase an eligible electric vehicle. Only individual taxpayers are eligible for this deduction.

8. Taxpayers can also claim deductions on any donations made toward charitable institutions till Rs 2,000. Donations made toward scientific institutions and political parties are also eligible for deductions.

9. Section 80GG of the Income Tax Act, 1961, allows taxpayers to claim a deduction on rent paid if they do not receive House Rent Allowance (HRA) as part of their salary. It is also available to self-employed individuals who pay rent.

10. A total of Rs 10,000 can be claimed for interest earned from savings bank accounts.

11. Specially-abled resident individual taxpayers are also eligible for additional deductions.

12. Under the old regime, Section 87 A also offers up to Rs 12,500 rebate for income up to Rs 5 lakh.

Deductions Under New Tax Regime:

1. For FY 2024-25, resident individuals with taxable income up to Rs 7 lakh are eligible for a rebate of up to Rs 25,000 under the new tax regime under Section 87 A. 

2. A standard deduction of Rs 75,000 is also available to salaried individuals under the new tax regime.

3. Taxpayers who opt for the new tax regime can choose Section 80CCD(2) to claim deduction for employer contributions to the Central Government Pension Scheme. There is a deduction limit of up to 14% of the employee's salary.

4. Section 24(b) allows deduction on interest paid on housing loans. In the case of let-out properties, there is no maximum limit on the amount of interest that can be claimed as a deduction.

5. Contributions made toward Agnipath Scheme can also be claimed.