Old Tax Regime Deductions

The central government introduced a default tax regime last year giving the taxpayers a choice of the tax regime that they think suits them best between the old and new tax regime. Taxpayers who opt for or want to choose the Old tax regime for FY 2024-25 can read the article to clear their minds.

In the new tax regime, the government does not offer the majority of tax deductions, whereas the Old Tax regime has ample ways to save your taxes through tax deductions.

Hence, many taxpayers, especially high-income taxpayers or people with many tax-saving investments prefer to choose the old tax regime.

The Standard deduction of 50,000 is the same for the old and new tax regimes for FY 2024-25. Other tax deductions and exemptions for the old tax regime applicability differ from the new tax regime, for instance, tax deductions like Section 80C, LTA, medical insurance premium deduction, etc, are not included under the new tax regime.

You can explore the Old Tax regime eligible deductions and exemptions further in the article and apply them to your gross income to know your taxable income.

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List of Old Tax Regime Tax Deductions

So, let’s discuss the Old Tax Regime Deductions for FY 2024-25 for you guys to get a clear idea.

Section 80C: The most popular tax deduction under the Old tax regime is Section 80C. This section provides a deduction to taxpayers on various eligible investments and expenses of taxpayers during the FY. The taxpayers can claim tax deductions up to ₹ 1.5 lakh on eligible investments under this section of tax deduction. The eligibility investment under Section 80C of the Old Tax regime has the following investment:
PPF
ELSS funds
Sukanaya Smaridhi Yojana
NSC
Citizen Saving Schemes, Tax-saving FDs
Hindu Undivided Families (HUF), etc.
Section 80D: Tax deductions on medical insurance premiums are applicable in the Old tax regime for up to ₹25,000 and a maximum of up to ₹ 50,000 per FY. The taxpayers can reduce their taxes with health insurance for individuals, dependent parents, spouses, and children. The section also provides a deduction of ₹5000/- for healthcare expenses on critical disease or preventive health diagnoses.
Investment in NPS: The taxpayers can utilize tax deductions on their eligible investment in NPS under section 80CCD. The taxpayers can deduct a maximum investment of up to ₹1,50,000 in NPS.
Deduction on Home Loan Interests: Under the old tax regime, taxpayers receive deductions ( up to ₹50,000 to ₹1,50000) on the interest he/she paid on home loans when they meet the eligibility under Section EE, Section 80 EEA.
Charities: Taxpayers can save taxes if they do charities or donations during the FY under Section 80G of tax laws. The tax deduction under this section is usually between 10 to 30% of the eligible donation you made in the FY.

Income Limit and tax rates under the Old Tax Regime

Taxpayers under 60 years can check the tax rates under the income tax slab they fall through the following table:

Income Bracket	Tax rate
0 to ₹2.5 lakh	Exempt
₹2.5 lakh to ₹5 lakh	5%
₹5 lakh to ₹10 lakh	20%
₹10 lakh to over	30%

For senior citizens over 60 years

Income Bracket	Tax rate
0 to ₹3 lakh	Exempt
₹3 lakh to ₹5 lakh	5%
₹5 lakh to ₹10 lakh	20%
₹10 lakh to over	30%

How do you calculate your taxes under the old tax regime of 2024?

The taxpayers can follow the below steps to calculate their taxable income under the Old Tax regime:

First, calculate your gross income including investments and allowances.
Now, check which tax deduction you can utilize and remove the deducted amount from gross income to get the taxable income.
Now, see under which tax slab you come and the tax rate applicable to you.
Now, calculate the tax you owe to the government based on the tax rate.

For instance, suppose you got ₹8,60,000 as gross total income, after applying tax deductions of 2,00000, you got 6,60,000 as your taxable income. Now, according to the income tax slab, you must pay 5% (5% of taxable income = 33000) and 20% (20% of 33,000= 6600) of your income, respectively.

Total payable tax = 33000 +6600 = 39,600

Old and new tax regimes both have their merits and demerits. However, your preference for tax regime depends on what benefits you the most, so choose wisely.

Old Tax Regime Deductions – How to calculate your taxable income?