How to choose beneficial tax regime. Whether to opt for old old tax regime or for new tax regime.

There are merits and demerits of both the old tax regime and new regimes, it becomes dificult for the taxpayers to pick the best suited tax regime. Whether to opt new tax regime or old tax regime, the said decision shall be based on quantom of allowable deductions such HRA, Deductions u/s 80C, Interest Dedution of Housing Loan, Deductions u/s 80TTA and 80TTB etc.

The following table exhibit a break even point of the amount of total deductions at which, the taxes under both regime would be equal. This table would be useful for the FY 2023-24 only.

So, if your actual deductions are More than Break Even Point of deduction, then you must opt for old tax regime as it would be lead to decrease in tax liability.

And if, your actual deductions are Less than Break Even Point of deduction, then you must opt for new tax regime as it would be lead to decrease in tax liability.

Table for Analysis

For the Financial Year 2023-24