Income Tax Department data released on 15 March 2025 shows that 88% of individual taxpayers have opted for the new regime, abandoning the old system’s array of deductions.
The new regime, effective from 1 April 2024, offers a flat ₹50,000 standard deduction and lower tax slabs but strips away benefits for 80C, 80D, and HRA.
Life insurance remains a cornerstone of financial security, says Rajesh Gupta, senior analyst at Paisabazaar. He recommends families maintain coverage at least 15–20 times annual income to protect against sudden loss of income.
Health insurance is equally vital; a 2024 survey by the Insurance Institute found 32% of households faced medical debt after a hospitalization, eroding retirement savings.
The National Pension System preserves an exemption for employer contributions up to 10% of salary; experts warn that maximizing these contributions can offset the loss of other deductions.
Financial planners are urging clients to review and adjust their insurance and NPS plans by 31 May 2025, ahead of the Ministry’s expected guidelines on 15 June 2025.