Will the Old Tax Regime Be Discontinued in 2025?
Will the Old Tax Regime Be Discontinued in 2025?
Latest Update on Tax Structure for FY 2024–25 | AY 2025–26
With the Indian government introducing a simplified new tax regime under Section 115BAC, many taxpayers are asking:
“Will the old tax regime be discontinued from 2025?”
“Can I still claim deductions under 80C, 80D, and HRA in the future?”
Let’s decode the current status and clarify the future of the old regime in light of Budget 2024 and government announcements.
✅ Current Status of Old vs New Regime (FY 2024–25)
• From FY 2023–24, the new tax regime is the default for all taxpayers
• However, the old regime is still available as an option
• Taxpayers can actively choose between the two while filing Income Tax Returns
The government has not yet passed any legislation or official notification that eliminates or abolishes the old tax regime.
As of Assessment Year 2025–26 (for income earned in FY 2024–25):
✔️ Both tax regimes are still valid
✔️ Salaried individuals can switch regimes every year
✔️ Business owners can opt out only once, unless eligible
❗ Has the Government Announced a Phase-Out Plan?
So far, no official timeline or budget announcement has declared that the old tax regime will be discontinued in 2025 or any specific year.
However, there are indirect indicators that the government wants to:
• Promote the new tax regime as a simplified system
• Encourage taxpayers to shift by making it the default
• Offer fewer incentives in the old regime for future adoption
But until a formal notification is issued, the old regime remains fully functional, and taxpayers can continue using it.
🧾 Key Differences Driving the Shift
| Feature | Old Regime | New Regime |
| Deductions Allowed | Yes (80C, 80D, HRA, LTA, etc.) | No (except standard deduction, NPS employer contribution) |
| Tax Rates | Higher | Lower |
| Default Status | Optional | Default |
| Paperwork & Proofs | More documentation required | Simple, no proof needed |
While the new regime is designed for ease, many taxpayers with significant deductions still benefit from the old regime.
🔍 Will Old Regime Be Discontinued in 2025?
As of now:
1. ❌ No, the old regime will not be discontinued in 2025.
2. There is no legal announcement, Finance Bill, or notification that phases it out.
3. You can continue to opt for the old regime in AY 2025–26 (filing ITR for FY 2024–25).
However, the long-term goal seems to be a gradual shift toward the new system, making it simpler and more uniform, especially for middle-class taxpayers.
🔮 What Could Happen in the Future?
If the government decides to phase out the old regime:
• It will likely give 1–2 years’ notice to help taxpayers plan
• Businesses, HR departments, and tax planners will need transition time
• A transition policy might allow senior citizens or low-income groups to continue under the old system
For now, you have complete flexibility to choose what suits you best.
✅ Final Thoughts
As of FY 2024–25 and AY 2025–26, the old tax regime is still available and can be opted for by eligible taxpayers. There is no official confirmation or timeline for its discontinuation in 2025.
Taxpayers should make regime choices based on real tax savings, not assumptions about discontinuation. Keep an eye on future budgets and Finance Bills for any formal updates.
