ITR Filing 2026: Choose the new tax system or the old one? Which one suits your pocket? – informalnewz

ITR Filing 2026: When it comes time to file taxes, the biggest question is whether to adopt the new tax system or stick with the old one. On the surface, the new tax system seems simpler and cheaper, but it’s not necessarily right for every salaried individual.

Add informalnewz.com as a Preferred Source

ITR Filing 2026 : When it comes time to file taxes, the biggest question is whether to adopt the new tax system or stick with the old one. On the surface, the new tax system seems simpler and cheaper, but it’s not necessarily right for every salaried individual. The real decision depends on your income, expenses, and tax planning.

Which would be better: the new or the old tax system?

The new tax system comes with lower tax rates but doesn’t offer most exemptions and deductions. The old system, on the other hand, has higher tax rates, but allows you to reduce your taxes by availing various exemptions. This is why choosing the right option between the two isn’t a straightforward decision.

What is the benefit of the new tax system?

The new tax system offers more relief to the middle class. If your annual income is up to ₹12 lakh, you won’t have to pay any tax. Additionally, a standard deduction of ₹75,000 is available, making income up to ₹12.75 lakh tax-free. This system is beneficial for those who don’t want to spend much time on investment or tax-saving planning.

How to save tax in the old system

The old tax system is beneficial for those who invest in advance to save tax.

Under Section 80C, you can save tax through PPF, LIC, ELSS, health insurance premiums, home loans and interest, HRA, and LTA. Taking advantage of these can significantly reduce your tax liability, even if your tax slabs are higher.

Don’t just decide on your tax slab.

There are some changes in the 2026 rules that affect both systems. For example, some company-provided benefits still help you save tax, regardless of which system you choose. The tax exemption limit for office meal vouchers, such as Sodexo or Pluxee, has now been increased to ₹200 per meal. This could make a portion of your salary tax-free.

Additionally, the tax rules for company-provided cars apply in both systems. Cars with smaller engines or electric cars are taxed less.

Which one is right for you?

If you have a flat salary and don’t invest much, the new tax system may be easier and more effective. However, if you take HRA, pay insurance, have a home loan, or make regular investments, the old system may be more beneficial.

There’s no single tax-saving formula that applies to everyone. The new system offers simplicity, while the old system benefits those who plan. Therefore, it’s important to carefully consider your income, expenses, and investments before making a decision. Only then will you be able to make the right choices and save more of your income.

Read More: High Interest FD Rate: SBI, HDFC, ICICI and Yes Bank are offering higher interest rates to senior citizens.