The old tax regime and new tax regime refer to two different sets of income tax rules available to individual taxpayers in India.
The old tax regime is the traditional tax structure that has been in place for many years. Under the old tax regime, taxpayers can claim various deductions and exemptions available under the Income Tax Act to reduce their taxable income and thereby their tax liability.
The new tax regime was introduced in the Union Budget of 2020 and became effective from the financial year 2020-21. Under the new tax regime, taxpayers are offered lower tax rates but are not allowed to claim certain exemptions and deductions available under the Income Tax Act.
Taxpayers can choose to opt for either the old tax regime or the new tax regime, depending on which option is more beneficial for them.