New vs old income tax regime after Budget 2025: 8 salary perks to save around Rs 1.35 lakh income tax under old regime

New versus old income tax regime post Budget 2025: The new tax regime now offers complete tax exemption for annual earnings up to Rs 12 lakh. Including the Rs 75,000 standard deduction, individuals earning up to Rs 12.75 lakh annually (Rs 1.06 lakh monthly) will now have zero tax liability from FY 2025-26 onwards.
Currently, 6.3 crore out of 8.75 crore individual taxpayers have adopted the new regime, with projections suggesting an additional one crore taxpayers will switch next year due to lower tax rates.
However, it is important to note that whilst the Union Budget 2025 proposals have altered public perception of the new income tax regime, claims about the old regime’s demise are premature.
Also Read | New Income Tax Bill cleared by Cabinet: What is the New Income Tax Bill & why is it being introduced? Explained
Although the new tax regime appears advantageous, the old tax regime still offers substantial tax reduction opportunities through strategically structured salary packages with tax-efficient perks, says Sudhir Kaushik, CEO and founder of Taxspanner. Beyond house rent allowance, numerous options exist to minimise tax obligations through appropriate cost-to-company restructuring.
In a column in ET, Sudhir Kaushik lists 8 salary perks that taxpayers can avail to reduce their tax outgo under the old income tax regime:
These eight salary perks offer potential tax savings exceeding Rs.1.35 lakh!

*In 30% tax bracket **Paid annually
LTA or Leave Travel Allowance
Family holiday travel cost reimbursement remains tax-free when claimed twice within four years. LTA must be included in CTC at the year’s start, without later modifications or tax return claims.
Meal Coupons
Meal vouchers offer tax exemption up to Rs 50 per meal, approximately Rs 2,200 monthly. Digital wallets have simplified this long-standing benefit’s usage and compliance.
Also Read | Income Tax Slabs FY 2025-26 explained: 20 FAQs individual taxpayers should check to understand tax rates, income tax benefit under new tax regime
Newspapers & Telecom
Work-from-home internet and telephone expenses increased during the pandemic. These reimbursements, alongside newspaper and periodical costs, remain tax-free with proper documentation.
Fuel & Travel Expense
For official taxi travel, the complete amount is reimbursable without tax implications. When using personal or company vehicles for work purposes, one can claim fuel and maintenance expense reimbursements. For vehicles used both professionally and personally, the taxable value stands at Rs 2,700 for engines below 1.6 litre and Rs 3,300 for larger ones.
Moveable Assets
Significant savings arise when organisations purchase moveable assets for staff. Under Section 17(2), company-purchased gadgets and appliances for employee personal use face only 10% taxation. Computer usage incurs no tax.
Also Read | New vs old income tax regime after Budget 2025: Post income tax slab changes, which tax regime is better for salaried middle class taxpayers?
Driver’s Salary
For senior executives, driver employment options exist. The driver’s wages carry a modest taxable value of Rs 900 monthly, offering substantial tax advantages.
Learning and Fitness
Organisations often cover gymnasium memberships and skill enhancement courses. These benefits remain tax-free with proper usage documentation.