Question 1

What is the difference between Old and New Tax Regime?

Accepted Answer

The Old Tax Regime offers progressive tax rates (0%, 5%, 20%, 30%, 36%) with various deductions and exemptions like Section 80C, HRA, LTA, etc. The New Tax Regime offers lower simplified rates (0%, 5%, 20%, 30%, 36%) but with limited deductions. Choose based on your income and available exemptions.

Question 2

Which tax regime is better for me?

Accepted Answer

Choose Old Tax Regime if you have significant deductions (HRA, home loan interest, Section 80C investments). Choose New Tax Regime if you have minimal deductions and want simplified tax slabs. Use our calculator to compare both regimes based on your specific situation.

Question 3

What deductions are available in Old Tax Regime?

Accepted Answer

Old Tax Regime offers deductions like Section 80C (₹1.5 lakh), Section 80D (medical insurance), HRA exemption, LTA, home loan interest (₹2 lakh), standard deduction (₹50,000), and professional tax. These can significantly reduce taxable income.

Question 4

Can I switch between tax regimes every year?

Accepted Answer

Yes, you can choose between Old and New Tax Regime every financial year. However, for salaried individuals, the choice must be made at the beginning of the year through Form 10BB. You can switch regimes annually based on your changing financial situation.

Question 5

What is SIP and how does it work?

Accepted Answer

SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly in mutual funds. It helps in averaging the purchase cost and benefits from the power of compounding over time.

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