Will the Old Tax Regime Continue in India?
Will the Old Tax Regime Continue in India?
Everything You Need to Know in 2025
With the government promoting the New Tax Regime as the default choice, many taxpayers are wondering—
“Will the old tax regime be discontinued?”
“Should I still invest for tax deductions under 80C or 80D?”
In this article, we’ll answer whether the old tax regime will continue beyond 2025, its current status, and what you should keep in mind for tax planning in FY 2025–26 and beyond.
📘 What Is the Old Tax Regime?
The Old Tax Regime is the traditional tax structure that allows taxpayers to claim various deductions and exemptions, including:
• Section 80C (LIC, PPF, ELSS, etc.) – up to ₹1.5 lakh
• Section 80D (health insurance)
• HRA (House Rent Allowance)
• LTA (Leave Travel Allowance)
• Interest on home loan under Section 24(b)
This regime uses higher tax rates, but offers multiple avenues to reduce taxable income through planned investments.
🆕 New Tax Regime: The Default from FY 2023–24
From FY 2023–24, the New Tax Regime became the default tax system in India. It offers:
• Lower tax rates
• Fewer deductions/exemptions
• Simpler return filing process
To stay in the old regime, taxpayers must explicitly opt out of the new regime while filing their ITR.
🔍 Will the Old Tax Regime Be Discontinued?
As of now (2025), the old tax regime is still active and available.
✅ There is no official announcement from the government to phase it out in FY 2025–26 or FY 2026–27.
Taxpayers can continue using it if they prefer to claim deductions and are willing to manage the paperwork and investment commitments.
🗓️ What May Happen in the Future?
While the government is pushing for wider adoption of the new regime, here’s what experts predict:
1. Gradual discouragement, not abrupt removal
2. Further simplification of the new regime to make it more appealing
3. Possible phasing out of the old regime in the next 2–3 years, but with prior notice
So, as a taxpayer, you still have a choice in FY 2025–26 and AY 2026–27.
✅ Should You Still Use the Old Regime?
Choose the old regime if:
• You claim deductions over ₹2.5–₹3 lakh annually
• You pay rent and claim HRA
• You have a home loan interest deduction
• You actively invest in tax-saving instruments
Choose the new regime if:
• You want zero paperwork and simplicity
• You don’t invest in 80C, 80D regularly
• Your income is below ₹7 lakh (you get a full rebate under Section 87A)
🧮 Quick Comparison: Old vs New (FY 2025–26)
| Feature | Old Regime | New Regime (Default) |
| Basic exemption | ₹2.5L / ₹3L / ₹5L | ₹3L (to be ₹4L from FY 2026–27) |
| Tax Deductions | ✅ Yes | ❌ Limited |
| Standard Deduction | ₹50,000 | ₹50,000 (₹75,000 from FY 2026–27) |
| Simplicity | ❌ No | ✅ Yes |
| Best For | Tax savers | Those with low investments |
Final Words
Yes, the old tax regime will continue in FY 2025–26 and is fully available to all taxpayers. While the government is nudging users toward the new system, there’s no legal change yet that discontinues the old regime.
Continue choosing the regime that helps you save the most tax based on your income, lifestyle, and investments.
