The deadline for filing Income Tax Returns (ITR) for the financial year 2024–25 (assessment year 2025–26) is fast approaching, with September 15 set as the last date. For salaried taxpayers, one of the most common dilemmas is deciding whether to opt for the old tax regime or the new tax regime. The choice directly impacts how much tax you save, depending on your salary structure, deductions, and exemptions.

If your annual income is up to ₹15 lakh, the decision becomes particularly important. According to tax experts, those with deductions exceeding ₹4.58 lakh may benefit more from the old tax regime, which allows a wide range of deductions and exemptions. On the other hand, the new regime, which has lower tax rates but minimal exemptions, may suit those with fewer deductions.

Adding to the discussion, a recent ruling by the Income Tax Appellate Tribunal (ITAT) has provided some relief. The tribunal clarified that taxpayers earning less than ₹7 lakh annually can claim a rebate under Section 87A, which also applies to both long-term capital gains (LTCG) and short-term capital gains (STCG). Earlier, this rebate was considered applicable only on STCG.

The simplest way to decide is by using the income tax calculator available online. By entering your salary details, deductions, and exemptions, you can instantly compare the tax liability under both regimes.

• If your total income is up to ₹7.75 lakh, the new tax regime may work better, as it provides a rebate of up to ₹25,000 under Section 87A.

• For financial year 2024–25, taxpayers opting for the new regime also receive a ₹75,000 rebate, while those under the old regime get ₹50,000.

One of the biggest grey areas has been whether Section 87A rebate applies to capital gains. ITAT’s latest ruling indicates that if the income is below ₹7 lakh, the rebate should extend to both LTCG and STCG. However, the ITR filing portal has not yet fully integrated this feature, creating some confusion among taxpayers.

Here’s a quick breakdown of income levels and deductions to help decide:

• ₹8 lakh salary – Old regime is better only if deductions exceed ₹2.5 lakh.

• ₹9 lakh salary – Old regime works best if deductions are above ₹3 lakh.

• ₹10 lakh salary – Opt for old regime if deductions cross ₹3.5 lakh.

• ₹12 lakh salary – Old regime becomes favorable if deductions exceed ₹4.18 lakh.

• ₹15 lakh salary – Choose old regime if deductions are more than ₹4.58 lakh.

For those earning above ₹15 lakh, the tax calculator remains the most effective way to identify which regime offers maximum savings.

Salaried taxpayers must also ensure they choose the right ITR form while filing:

• ITR-1 (Sahaj): For individuals with income primarily from salary.

• ITR-2/ITR-3: For those with income from multiple sources, such as business, capital gains, or property.

It’s worth noting that the new tax regime is set as default in the ITR forms. However, taxpayers still have the option to switch back to the old regime if it offers more benefits.

With the ITR filing deadline of September 15, 2025, approaching quickly, salaried taxpayers should carefully evaluate which tax regime suits their financial profile. If your deductions are substantial, the old regime could save you more. But for those with fewer deductions, the new regime may prove simpler and more cost-effective. Using the income tax calculator before making the final choice can help avoid last-minute confusion and ensure maximum savings.