Tax Regime Dilemma: Old vs New for FY25-26 Investment Proofs

• Companies are requesting investment proofs for FY2025-26, prompting employees to choose between old and new tax regimes.
• Old regime offers various deductions (80C, 80D, home loans) but has higher tax rates; new regime has lower rates and a standard deduction of ₹75,000.
• New regime is beneficial if total deductions are less than ₹8 lakh, with income up to ₹12 lakh being tax-free (plus ₹75,000 standard deduction).
• Old regime suits those with significant monthly expenses like HRA, home loan EMIs, and tax-saving investments.
• Employees opting for the old regime must submit various proofs (HRA, 80C, 80D, LTA, etc.); new regime requires no such submissions.

Why It Matters: Employees must weigh deductions against lower tax rates to choose the optimal tax regime for FY2025-26.