ITR Filing: 6 Ways the New Tax Regime Can Help You Save More in FY2024- 25

As the new financial year begins, taxpayers are preparing to file their ITRs (income tax returns) for FY2024- 25 (AY2025- 26). Many people are also comparing the old and new tax regimes to choose the best option for saving taxes.

While the old tax regime still offers more deductions and exemptions, the new tax regime has lower tax rates and is suitable for those who haven’t made many tax-saving investments. Let’s take a look at 6 ways the new regime can help you save money on your income tax.

Higher Standard Deduction

In the new tax regime, the standard deduction has been increased to ₹75,000, compared to ₹50,000 in the old regime. This means more of your salary is tax-free.

Read More, ITR Filing 2025: A Step-by-Step Guide to Using the ‘e-Pay Tax’ Feature.

NPS Contribution Exemption – Section 80CCD(2)

If your employer contributes to your NPS (National Pension System), you can claim extra tax benefits:

• Government employees: Up to 14% of basic salary plus DA is tax-exempt

• Private sector employees: Up to 10% is tax-exempt
  Note: This benefit is only for salaried individuals.

Agniveer Corpus Fund – Section 80CCH(2)

Under the Agnipath scheme, contributions made by both the Agniveer and the government are fully tax-free. The final amount received under this scheme is also exempt from tax.

Family Pension Exemption – Section 57(iia)

If someone receives a family pension after a government or private employee’s death, a part of it is exempt:

• 1/3rd of the pension or ₹25,000, whichever is lower, is tax-free.

Transport & Conveyance Allowance

• Transport Allowance: Disabled employees can claim up to ₹3,200 per month as a tax exemption if they commute to work.

• Conveyance Allowance: Actual expenses incurred while doing office work can be claimed as a deduction.

New Exemptions under Section 10

Some new tax-free benefits have been included under Section 10 in the new regime:

• Voluntary Retirement Scheme (VRS): Up to ₹5 lakh is tax-free.

• Gratuity: Fully tax-free for government employees; for others, it’s partially exempt depending on conditions.

• Leave Encashment: Up to ₹25 lakh is exempt at the time of retirement or resignation.

Conclusion

If you don’t invest in many tax-saving instruments, the new tax regime may suit you better. It offers a simpler and lower tax structure, along with some basic exemptions and a higher standard deduction—ideal for salaried individuals with fewer deductions. Always compare both regimes before filing your ITR to choose the one that gives you the best savings.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.          

Investments in securities market are subject to market risks, read all the related documents carefully before investing.