Old Tax Regime: Tax Rates and Deductions Under The Old Tax Regime

Senior citizens aged 60 to 80 benefit from a higher exemption limit of Rs 3 lakh. Incomes between Rs 3 to Rs 5 lakh attract a 5% tax rate, with the remaining tax rates aligning with those applicable to general citizens. Super senior citizens aged 80 and above have a basic exemption limit of Rs 5 lakh. Incomes between Rs 5,00,001 to Rs 10 lakh incur a 20% tax rate, and amounts exceeding this threshold face a 30% tax rate. Similar to the new regime, a 4% cess is applied to the income tax amount, with surcharges for incomes exceeding Rs 50 lakh.

It’s essential to consider available tax-saving deductions under the old tax regime when deciding whether to opt for this system.

Tax-Saving Alternatives in the Old Tax Regime

80C Deductions

In the old tax regime, Section 80C emerges as a pivotal incentive, allowing deductions of up to Rs 1.5 lakh. Taxpayers can invest in instruments such as the National Pension System (NPS), Equity Linked Saving Schemes (ELSS), Unit Linked Insurance Plan (ULIP), and Public Provident Fund (PPF). Additionally, deductions of Rs 1.5 lakh are applicable to life insurance premiums, contributions to the Sukanya Samriddhi Account, National Savings Account (NSC), Senior Citizens Saving Schemes (SCSS), and fixed deposits. Section 80C also covers expenses like tuition fees for two children, registration charges, stamp duty for property, and home loan repayments.

Home Loan Payments

Taxpayers can avail themselves of a Rs 1.5 lakh tax exemption on principal and interest under Sections 80C and 24 subsections. First-time homebuyers can further benefit from a Rs 2.5 lakh rebate on home loan interest. Stamp duty and registration charges can also be deducted under Section 80C.