Old Tax Regime
The original income tax structure with higher slab rates but access to deductions and exemptions like 80C, HRA, and home loan interest, still available by explicit choice.
The old tax regime is the income tax structure that existed before the new regime was introduced, and it remains available to taxpayers who explicitly choose it, salaried taxpayers can switch between regimes each year, while those with business income face more restrictions on switching back and forth. It has comparatively higher slab rates but allows a long list of deductions and exemptions: Section 80C, HRA, home loan interest, 80D health insurance premiums, and more.
Whether the old regime works out cheaper than the new one depends entirely on how much you can actually claim under it. A taxpayer with a home loan, HRA, and a full 80C investment often does better under the old regime; someone with few deductions to claim usually does better under the new regime's lower rates. It's worth computing both ways before filing rather than assuming.
This glossary entry is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Rules and rates change, so consult a qualified Chartered Accountant for advice specific to your situation.