₹12.75 Lakh Tax-Free Income: Is Old Tax Regime Fading Out Quietly?

• Budget 2025-26 made income up to ₹12.75 lakh tax-free for salaried taxpayers under the new tax regime, including a ₹60,000 rebate and ₹75,000 standard deduction.
• Government aims for a gradual shift from the old tax regime by making the new one attractive, rather than formally abolishing the old system.
• Less than 20% of taxpayers now remain under the old regime, which is becoming financially unviable for many due to reduced relevance of traditional deductions.
• The old regime remains beneficial only for those with very high deductions, especially housing-related, exceeding approximately ₹8.5 lakh.
• This move signals a policy shift towards a simpler, more transparent tax system, reducing disputes and simplifying compliance.

Why It Matters: New tax regime's ₹12.75 lakh tax-free limit signals the quiet phasing out of the old system.