Investment Health Check

Yes, but the exempt amount is ₹1.25 lakh per financial year. Under Section 112A, long-term capital gains on listed equity shares and equity-oriented mutual funds (where STT is paid, held over 12 months) are exempt up to ₹1.25L/year; gains above that are taxed at a flat 12.5% (this rate and threshold apply to transfers made on or after 23 July 2024 — before that it was ₹1 lakh exempt and 10% tax).

Short-term gains are treated differently. If you hold listed equity/equity mutual funds for 12 months or less, the gain is a short-term capital gain under Section 111A, taxed at a flat 20% (raised from 15%, for transfers on/after 23 July 2024) — with no separate ₹1.25L-style exemption of its own. That said, if you have little or no other taxable income, any unused portion of your basic exemption slab can still be adjusted against this short-term gain before the 20% rate applies.

This is a special capital-gains rate provision, so both the LTCG and STCG treatment apply identically whether you choose the Old or New Regime — it isn't a Chapter VI-A deduction that the New Regime disallows. Note also: the Section 87A rebate (which makes normal slab income up to ₹12L tax-free in the New Regime) does not apply to Section 112A LTCG, and — from AY 2026-27 (FY 2025-26) onward — a Finance Act 2025 amendment also expressly excludes Section 111A STCG from this rebate. (For AY 2024-25/2025-26 returns, this point around 111A and the 87A rebate was under litigation, with at least one tribunal ruling in the taxpayer's favour — so treat older-year positions as fact-specific.) In short: don't assume large equity gains are automatically shielded by the ₹12L rebate, especially going forward.

Potentially, under Section 54F — but it's more specific than "invest the gain in a house." 54F applies to long-term capital gains on any capital asset other than a residential house (shares, equity/debt mutual funds, land, gold, etc.). To claim full exemption, you must reinvest the entire net sale consideration (not just the gain) into one residential house in India, within 1 year before or 2 years after the sale (or complete construction within 3 years).

Key conditions: you must not own more than one other residential house on the date of transfer; any amount not yet reinvested by the tax-filing deadline must be parked in a Capital Gains Account Scheme (CGAS); and since the Finance Act 2023, the exemption is capped at an investment of ₹10 crore (any cost above that is ignored for the exemption calculation). This is a capital-gains exemption, so it's available regardless of which tax regime you choose for your salary/other income.

Yes — this is Section 54, and it's distinct from the previous question. Long-term capital gains from selling a residential house are exempt if reinvested in another residential house, within 1 year before or 2 years after the sale (or 3 years to construct). Here, only the gain needs to be reinvested, not the full sale price.

You can even invest in two residential houses instead of one, as a one-time option, if the capital gain does not exceed ₹2 crore. Since Finance Act 2023, the exemption is capped at investment of ₹10 crore. As with 54F, unutilized gains must go into a Capital Gains Account Scheme, and this rule applies under both tax regimes.

PPF (Public Provident Fund) is a genuine EEE product — Exempt on contribution (under old regime only, via 80C), Exempt on interest earned, and Exempt on maturity proceeds (Section 10(11)). Current interest rate is 7.1% p.a. and the annual contribution limit is ₹1.5 lakh.

Important nuance: the New Regime removes the 80C deduction on your contribution, so you don't get an upfront tax break for putting money into PPF. But the interest and maturity amount stay 100% tax-free under both regimes — because that exemption comes from Section 10, not from Chapter VI-A. PPF remains a good place to park money once it's already invested, just without the New Regime's upfront tax break.

EPF is broadly EEE too, but with an important cap since Budget 2021: interest earned on your own contributions above ₹2.5 lakh in a financial year is now taxable (the threshold rises to ₹5 lakh in years where your employer makes no matching contribution — relevant for some government employees). TDS applies to this excess interest.

For withdrawal: if you've completed 5 years of continuous service, your EPF withdrawal (principal + interest, within the normal contribution limits) is fully tax-free. Withdrawing before 5 years generally makes the withdrawal taxable (added to income, with TDS deducted by the EPFO in many cases), though exceptions exist for reasons like ill-health, employer business closure, or if the total withdrawal is below the TDS threshold with Form 15G/H submitted. This applies the same way under both regimes.

At maturity (age 60), you can withdraw up to 60% of your NPS corpus as a tax-free lump sum. The remaining 40% must compulsorily go into an annuity (a regular pension product) — the income you later receive from that annuity is taxed at your normal slab rate, in the year you receive it. (A 2024 PFRDA circular allows certain non-government subscribers with a corpus above ₹12 lakh to withdraw up to 80% lump sum with only 20% mandatory annuity — but the standard 60/40 rule is what applies to most subscribers.)

If your total corpus at maturity is ₹5 lakh or less, you can withdraw the entire amount without being forced to buy an annuity. Note this tax treatment is for NPS Tier 1 (the retirement account with lock-in); Tier 2 has no lock-in but also gets none of these tax benefits — it's taxed like a regular mutual fund investment. These rules are the same under both tax regimes.

Yes — Section 80CCD(2), your employer's contribution to your NPS account, is one of the few deductions the New Regime still allows in full. For private-sector employees, Budget 2024 raised the New Regime limit to 14% of salary (basic + DA) — up from 10%, which is still the limit under the Old Regime for private employees. Government employees get 14% under both regimes.

This is a genuinely useful lever: if your employer offers an NPS contribution structuring option (as part of your CTC), opting into it can meaningfully cut your taxable income even on the New Regime, since it's the employer's contribution rather than your own 80C-style investment.

Yes. Budget 2024 raised the standard deduction under the New Regime to ₹75,000 for salaried employees and pensioners (up from ₹50,000). This is deducted automatically from your gross salary/pension before computing tax — no investment or proof required.

Yes — under Section 57(iia), family pension (received by a legal heir after the pensioner's death) gets a deduction of ₹25,000 or one-third of the pension, whichever is lower (raised from ₹15,000 by Budget 2024). This deduction is explicitly retained under the New Regime.

Yes, under Section 80CCH, contributions to the Agniveer Corpus Fund are deductible under the New Regime — this is a rare full Chapter VI-A-style deduction the New Regime allows. If this applies to you, confirm the exact scope (individual vs. matching government contribution) with the current CBDT circular or a tax advisor, as detailed treatment can be updated.

Not for a self-occupied property — the New Regime disallows the well-known ₹2 lakh deduction under Section 24(b) for that case. But if you own a let-out (rented) property, interest on the home loan for that property is still deductible against the rental income under Section 24(b), even in the New Regime — this deduction isn't capped at ₹2 lakh here, and can even create a "loss from house property" in some cases (though set-off of that loss against other income is restricted under the New Regime).

Gratuity received under the Payment of Gratuity Act is exempt up to ₹20 lakh (lifetime limit across employers), regardless of tax regime. Government employees get full exemption with no cap. This is a retirement-benefit exemption, not a Chapter VI-A deduction, so the New Regime doesn't touch it.

Leave encashment received on retirement/resignation (non-government employees) is exempt up to ₹25 lakh (raised from a long-standing ₹3 lakh limit by Budget 2023) — a big change if you weren't aware of it. Government employees get full exemption. This applies under both regimes.

Only above a threshold. Under Section 17, an employer's combined contribution to your EPF, NPS, and superannuation fund is tax-free as a perquisite up to ₹7.5 lakh per year in aggregate; any excess is added to your taxable salary, and interest/returns earned on the excess portion are also taxable. Worth checking if your employer offers a high CTC structuring with large retirement-fund contributions.

Post Budget 2025: ₹0–4L: nil, ₹4–8L: 5%, ₹8–12L: 10%, ₹12–16L: 15%, ₹16–20L: 20%, ₹20–24L: 25%, above ₹24L: 30%. Combined with the standard deduction and the 87A rebate below, this is what pushed the effective tax-free threshold for salaried individuals to roughly ₹12.75 lakh.

Largely yes, for normal slab-rate income — Section 87A rebate was raised to ₹60,000, which fully offsets tax on income up to ₹12 lakh (₹12.75 lakh for salaried employees, after the ₹75,000 standard deduction). But this rebate does not apply to income taxed at special rates — such as long-term/short-term capital gains under Sections 112A/111A. So if you have equity capital gains on top of a ₹12L salary, you may still owe tax on the gains even though your salary alone would be tax-free.

No. Switching tax regimes only changes whether you get an upfront deduction on new contributions going forward — it does not undo the tax treatment of money already invested. PPF interest/maturity, ELSS gains (subject to the ₹1.25L LTCG exemption and 12.5% rate above it), and traditional insurance maturity proceeds (subject to their own exemption conditions under Section 10(10D)) keep their tax treatment regardless of which regime you're on this year. You simply stop getting the 80C deduction for new money you put in while on the New Regime.

If you have only salary/pension income (no business or professional income), yes — you can choose whichever regime is more beneficial each year when filing your return, and switch back and forth freely. If you have business or professional income, switching back to the Old Regime after opting for the New Regime is restricted (generally allowed only once in a lifetime), so plan more carefully in that case. Either way, running both calculations before filing (or using a salary calculator with both regimes) is the only reliable way to know which one saves you more this year.