Section 203
Old Tax Regime — Tax Rates for Individuals
Section No.
203
Chapter
XIII
ITA 1961 Predecessor
Finance Act rates
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Section Details
The old tax regime under the Income Tax Act 2025 refers to the progressive tax slab structure with a basic exemption of ₹2.5 lakh (₹3 lakh for senior citizens; ₹5 lakh for super senior citizens), under which all Chapter VI-A deductions, HRA, LTA, home loan interest, and other exemptions remain available. Since Section 202 (new regime) is now the default, taxpayers must actively opt out to use the old regime. Rates are prescribed in the Finance Act (Part I / First Schedule).
Key Provisions
- OLD TAX REGIME SLABS — Tax Year 2026-27:
- FOR INDIVIDUALS (below 60 years):
- • Up to ₹2,50,000 — NIL
- • ₹2,50,001 to ₹5,00,000 — 5%
- • ₹5,00,001 to ₹10,00,000 — 20%
- • Above ₹10,00,000 — 30%
- FOR SENIOR CITIZENS (60 to 80 years):
- • Up to ₹3,00,000 — NIL
- • ₹3,00,001 to ₹5,00,000 — 5%
- • ₹5,00,001 to ₹10,00,000 — 20%
- • Above ₹10,00,000 — 30%
- FOR SUPER SENIOR CITIZENS (above 80 years):
- • Up to ₹5,00,000 — NIL
- • ₹5,00,001 to ₹10,00,000 — 20%
- • Above ₹10,00,000 — 30%
- REBATE: ₹12,500 if total income ≤ ₹5 lakh (effectively zero tax up to ₹5 lakh)
- ALL Chapter VI-A deductions available (Section 123/80C ₹1.5L, Section 126/80D, Section 119/NPS etc.)
- HRA exemption under Schedule V / Section 11 — fully available
- Home loan interest: up to ₹2 lakh cap for self-occupied (Section 22(1)(b)) — available
- TO OPT FOR OLD REGIME: Salaried — declare to employer + choose at ITR; Business — file Form 10IEA before ITR due date
- One-time switch rule: business taxpayers who opt for old regime cannot return to new regime
Chapter Context
Section 203 falls under Chapter XIII — Tax on Income of Certain Persons of the Income Tax Act 2025. This act came into force on 1 April 2026, replacing the Income Tax Act 1961. The equivalent provision in the old act was Finance Act rates.
Frequently Asked Questions
Under the old tax regime for Tax Year 2026-27: Individuals below 60: 0% up to ₹2.5 lakh; 5% from ₹2.5–5 lakh; 20% from ₹5–10 lakh; 30% above ₹10 lakh. Senior citizens (60–80): 0% up to ₹3 lakh; 5% from ₹3–5 lakh; 20% from ₹5–10 lakh; 30% above ₹10 lakh. Super senior citizens (80+): 0% up to ₹5 lakh; 20% from ₹5–10 lakh; 30% above ₹10 lakh. Section 156 rebate of ₹12,500 applies if total income ≤ ₹5 lakh — effectively zero tax up to ₹5 lakh.
Since Section 202 (new regime) is the default, you must actively opt out. For salaried employees: inform your employer at the start of the tax year (for TDS purposes); confirm the old regime choice while filing ITR — you can switch each year. For business taxpayers: file Form 10IEA electronically on the income tax portal before the ITR due date (31 July for non-audit; 31 October for audit cases). Important: business taxpayers can only switch to old regime ONCE — after switching, reverting to new regime is not permitted in subsequent years.
For senior citizens, the old regime often remains beneficial because: (1) Higher basic exemption of ₹3 lakh (vs ₹4 lakh in new regime — only ₹1 lakh difference); (2) Larger medical expenses → Section 126 (80D) deduction for health insurance is more valuable; (3) If senior citizens have bank interest income, Section 127 (80TTB — ₹50,000 deduction on interest) is available only in old regime; (4) Typically lower HRA/LTA claims but higher medical deductions. However, for senior citizens with income up to ₹12 lakh and fewer deductions, the new regime's zero-tax rebate is compelling. A comparison using actual income and deductions is essential.
The maximum tax savings under the old regime (vs new regime) come from claiming all available deductions: Section 123 (80C) ₹1.5 lakh + Section 126 (80D) ₹50,000 + Section 22(1)(b) home loan interest ₹2 lakh + Section 119(1B) NPS ₹50,000 + HRA exemption (varies). If total deductions reach ₹5+ lakh, the old regime typically generates lower tax for salary brackets of ₹15–50 lakh. However, for income up to ₹12 lakh, the new regime's zero-tax rebate cannot be beaten regardless of deductions.