New Delhi, July 1 -- The higher tax relief announced in Budget 2025 has made the new tax regime the preferred option for many salaried taxpayers. While lower tax rates and a higher standard deduction have improved its appeal, the choice is not always straightforward for those earning Rs.20 lakh a year.

At this income level, taxpayers are no longer eligible for the rebate under Section 87A, making the comparison between the two regimes more nuanced. Instead of relying on a rebate, the decision hinges on whether the lower tax rates under the new regime can outweigh the exemptions and deductions available under the old regime.

These include benefits such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), deductions under Sections...