Navigating the New Tax Regime: A Founder's Guide for FY 2025-26
Navigating the New Tax Regime: A Founder's Guide
With the New Tax Regime becoming the default option, many founders and employees are confused about their tax liabilities. Is the "Old Regime" with its deductions still relevant? Or is the "New Regime" with its lower rates the winner?
The Shift in Philosophy
The government's intent is clear: simplify the tax code by removing exemptions (like HRA, LTA, 80C) in exchange for lower headline tax rates. This benefits those who don't have locked-in capital in insurance or housing loans.
Impact on Founder Salaries
As a founder, you often have control over how you structure your own compensation. Under the New Regime, the focus shifts from "maximizing reimbursements" to "cash-in-hand."
- Standard Deduction: Now available under the New Regime as well.
- Surcharge Rationalization: The reduction in surcharge rates for high-income earners makes the New Regime highly attractive for founders drawing significant salaries.
What Should You Advise Your Team?
Your employees will look to you for guidance during investment declaration windows. The advice is no longer "invest in PPF blindly." It requires a personalized calculation. We recommend running a comparative simulation for every employee earning above ₹7 Lakhs.
Need help structuring your payroll for the new financial year? Let's have a chat.
