Section 115BAC · Default new tax regime for individuals and HUFs
The default new regime — lower slabs, fewer deductions.
- Status
- Default from AY 2024-25
- Standard deduction
- ₹75,000
- Rebate u/s 87A up to
- ₹7,00,000
- Most Chapter VI-A
- Not available
In plain English
Unless you actively opt out, your tax is now computed under the new regime: gentler slab rates, a flat ₹75,000 standard deduction for salaries, and zero tax up to ₹7,00,000 of taxable income. The catch — most of the old favourites like 80C, 80D and HRA are off the table.
| Meaning | Number |
|---|---|
| Standard deduction | ₹75,000 |
| Rebate u/s 87A up to | ₹7,00,000 |
What this section covers
From AY 2024-25 onwards Section 115BAC is the default tax regime for individuals, HUFs, AOPs (other than co-operatives), BOIs and artificial juridical persons. Slab rates are lower than the old regime, a standard deduction of ₹75,000 is available for salaried taxpayers, and a rebate u/s 87A covers tax up to taxable income of ₹7,00,000. The regime disallows most exemptions and deductions — HRA, LTA, 80C, 80D, 80E (except interest on education loan in specific cases), 80G (other than approved donations through employer), housing loan interest on self-occupied property, etc. Taxpayers with no business income can opt out every year; those with business income can opt out only once.
The legal text
“Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, the income-tax payable in respect of the total income of a person, being an individual or Hindu undivided family or association of persons (other than a co-operative society), or body of individuals… shall be computed at the rates given in the Table…”
Old Act vs New Act
| Aspect | Act, 1961 | Act, 2025 |
|---|---|---|
| Section | 115BAC | 202 |
| Topic | Default new tax regime for individuals and HUFs | |
| Verdict | Renumbered — concept retained | |
| Notes | The default regime is restated as Section 202 under the Income-tax Act, 2025. The concessional slab structure, standard deduction of ₹75,000 and the rebate threshold of ₹7,00,000 are carried forward. The list of disallowed deductions is retained. | |
Common confusion
Opting out is not the same as 'choosing' the old regime by default. Salaried taxpayers without business income can switch every year via Form 10-IEA; once a taxpayer with business income opts out, re-entry is restricted.
Who should know this
Related sections
Based on the official Income-tax Act, 1961 and the published Income-tax Act, 2025 as available on the Income Tax Department website. Always verify against the published Act and consult a qualified professional.