Old and New Tax as per Budget 2025 with Automatic Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E in Excel for the F.Y. 2025-26

 

Introduction

Confused about the difference between the old and new tax regimes after the Budget 2025? You're not alone. The Indian government continues to provide two tax options: one that offers deductions and exemptions (old), and another with lower rates but fewer exemptions (new). Choosing the right one is like choosing between two different phones—both work, but one might suit your lifestyle better.

In this article, we’ll explore the Old and New Tax as per Budget 2025 in plain English. We'll also guide you on how to handle tax arrears using the Automatic Income Tax Arrears Relief Calculator U/s 89(1) and Form 10E in Excel for FY 2025-26.

Table of Contents

Sr#	Headings
1	Understanding Old and New Tax Regimes
2	What’s New in the Budget 2025?
3	Comparison: Old vs New Tax Regime FY 2025-26
4	When Should You Choose the Old Tax Regime?
5	When the New Tax Regime is Better for You
6	Income Tax Arrears Explained
7	What is Section 89(1)?
8	Role of Form 10E in Claiming Relief
9	Why Use an Excel-Based Calculator for Relief?
10	Step-by-Step: How to Use the Excel Calculator
11	Benefits of Automatic Tax Relief Calculators
12	Common Mistakes to Avoid While Filing Form 10E
13	Tax Planning Tips for FY 2025-26
14	Internal Links to Tax Tools and Resources
15	Conclusion and Smart Takeaways

1. Understanding Old and New Tax Regimes

Old Tax Regime allows deductions under sections like 80C, 80D, and HRA, while the New Tax Regime offers lower slab rates but no deductions. Think of it as choosing between à la carte and buffet—one gives flexibility; the other gives simplicity.

2. What’s New in the Budget 2025?

The Union Budget 2025 was introduced:

• Increased rebate limits under the new regime.
• Standard deduction is now allowed in both regimes.
• Revised slab rates to favour middle-class taxpayers.

These changes aim to nudge more taxpayers toward the New Tax Regime.

3. Comparison: Old vs New Tax Regime FY 2025-26

Income Slab	Old Regime	New Regime
Up to ₹2.5L	Nil	Nil
₹2.5L–₹5L	5%	5%
₹5L–₹7L	20%	10%
₹7L–₹10L	20%	15%
₹10L–₹12.5L	30%	20%
₹12.5L–₹15L	30%	25%
Above ₹15L	30%	30%

Note: Under the new regime, individuals earning up to ₹7L can claim a full rebate under 87A.

4. When Should You Choose the Old Tax Regime?

Choose Old Regime if you:

• Claim deductions like 80C, 80D, HRA, etc.
• Have housing loan interest or children's tuition fees.
• Invest in tax-saving schemes like PPF or ELSS.

5. When the New Tax Regime is Better for You

Opt for the New Regime if you:

• Have minimal deductions.
• Prefer hassle-free tax filing.
• Are salaried with no major investments.

6. Income Tax Arrears Explained

Arrears refer to previous years' unpaid salary or pension received in the current year. Since they inflate your current year’s income, they might push you into a higher tax bracket.

7. What is Section 89(1)?

Section 89(1) provides relief when arrears cause a higher tax liability. It ensures you're taxed fairly by recalculating the income as if received in the correct year.

8. Role of Form 10E in Claiming Relief

To claim Section 89(1) relief, you must file Form 10E. It’s mandatory and should be submitted before filing your income tax return. This form details year-wise arrears and helps the IT department validate your claim.

9. Why Use an Excel-Based Calculator for Relief?

The Automatic Income Tax Arrears Relief Calculator in Excel:

• Computes relief under Section 89(1).
• Auto-fills Form 10E.
• Reduces manual errors.
• Saves time for both government and non-government employees.

You can download Automatic Income Tax Preparation Software in Excel for the Govt and Non-Govt Employees for the F.Y. 2025-26 with Form 10E.

10. Step-by-Step: How to Use the Excel Calculator

1. Enter basic details (Name, PAN, Assessment Year).
2. Input year-wise salary breakup.
3. Provide current year salary with arrears.
4. The sheet auto-calculates:
   1. Revised tax.
   1. Tax saved.
   1. Amount of relief.

11. Benefits of Automatic Tax Relief Calculators

• Error-free computation.
• Ready-to-upload Form 10E.
• Designed for both salaried and retired individuals.
• Supports Old and New Tax as per Budget 2025 formats.

12. Common Mistakes to Avoid While Filing Form 10E

• Not submitting Form 10E before filing return.
• Mismatch between salary slips and values entered.
• Selecting incorrect financial years.

Always cross-verify with your Form 16 and salary breakup.

13. Tax Planning Tips for FY 2025-26

• Review both regimes yearly.
• Use Excel tools for relief under Section 89(1).
• Declare investments early to avoid the last-minute rush.
• Keep records of arrears and Form 10E filed.

14. Internal Links to Tax Tools and Resources

• How to Calculate Income Tax Arrears Relief Calculation U/s 89(1) with Automatic Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E in Excel Format for the F.Y. 2025
• Download Automatic Income Tax Preparation Software in Excel for the Govt and Non-Govt Employees for the F.Y. 2025-26 With Form 10E

15. Conclusion and Smart Takeaways

Choosing between Old and New Tax as per Budget 2025 is easier when you understand your income structure and deductions. If you've received arrears, Section 89(1) relief with Form 10E in Excel can help you save tax smartly. Use technology to simplify your tax life—after all, why work hard when you can work smart?

FAQs

1. Can I switch between old and new tax regimes every year?
Yes, salaried individuals can choose their regime every financial year.

2. Is Form 10E mandatory for claiming Section 89(1) relief?
Absolutely. Without Form 10E, your relief claim will be rejected.

3. Can retirees use the Excel arrears calculator?
Yes, it’s designed for both government and non-government pensioners, too.

4. Where can I find the Excel calculator with Form 10E?
You can find it from the link below

5. Does the new regime offer a standard deduction now?
Yes, Budget 2025 has allowed standard deduction even under the new regime.

Download Automatic Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E in Excel for the F.Y. 2025-26