Old vs New Tax Regime
Compare income tax under old and new regime side-by-side. Enter HRA, 80C, 80D to see which saves more. Free, privacy-first — inputs never leave your browser.
Your Details
New Regime
Better₹97,500
Taxable
₹14,25,000
Effective %
6.50%
Net Income
₹14,02,500
Old Regime
₹1,46,640
Taxable
₹10,95,000
Effective %
9.78%
Net Income
₹13,53,360
Verdict
The new regime saves you ₹49,140 this year. Your deductions are not worth claiming at this income level.
For estimation only. Not professional financial, tax, or legal advice. Consult a qualified advisor before making decisions. Full disclaimer.
Old vs New tax regime — what is the trade-off?
Since FY 2023-24 the new regime is the default under section 115BAC of the Income-tax Act. It offers lower slab rates and a higher standard deduction (₹75,000) but disallows most Chapter VI-A deductions. The old regime has higher base rates but lets you subtract HRA, 80C, 80D, home-loan interest and more. The current slabs and the opt-out mechanics (Form 10-IEA for business income) are published at incometaxindia.gov.in.
Rates side-by-side (FY 2026-27)
| Income | Old Regime | New Regime |
|---|---|---|
| Up to ₹2.5L | Nil | Nil (up to ₹4L) |
| ₹2.5L – 5L | 5% | Nil |
| ₹5L – 10L | 20% | 5% / 10% |
| ₹10L – 15L | 30% | 10% / 15% |
| Above ₹15L | 30% | 15% to 30% (slab-wise) |
87A rebate: ₹12,500 (old, up to ₹5L) vs ₹60,000 (new, up to ₹12L taxable). Standard deduction: ₹50,000 (old) vs ₹75,000 (new).
Break-even by income level (salaried, FY 2026-27)
The old regime is worthwhile only if your total deductions exceed the table below. Below these levels, the new regime almost always wins.
| Gross Salary | Break-even deductions |
|---|---|
| ₹7,50,000 | ~₹1,87,500 |
| ₹10,00,000 | ~₹2,62,500 |
| ₹12,50,000 | ~₹3,12,500 |
| ₹15,00,000 | ~₹3,62,500 |
| ₹20,00,000 | ~₹4,25,000 |
| ₹25,00,000+ | ~₹4,50,000 |
Worked example — ₹15 lakh salary
New regime: 15,00,000 − 75,000 std ded = ₹14,25,000 taxable. Tax = ₹93,750 + 4% cess = ₹97,500.
Old regime with ₹1.5L 80C + ₹25K 80D + ₹1.2L HRA + ₹50K standard deduction = ₹3.45L deductions → taxable ₹11,55,000. Tax = 12,500 + 1,00,000 + 46,500 = ₹1,59,000 + 4% cess = ₹1,65,360. New regime saves ~₹67,860 here. With home-loan interest of ₹2L added, old-regime deductions rise to ₹5.45L and the old regime pulls ahead by ~₹3,000.
Deductions available only in the old regime
- Section 80C (PPF, ELSS, life insurance, home loan principal) — ₹1.5 lakh cap.
- Section 80CCD(1B) — additional ₹50,000 NPS deduction.
- Section 80D — health insurance ₹25,000 (self) + ₹50,000 (senior parents).
- Section 10(13A) HRA exemption.
- Section 24(b) — home-loan interest up to ₹2 lakh (self-occupied).
- LTA, food coupons, professional tax, entertainment allowance.
Available in both regimes
- Section 80CCD(2) — employer NPS up to 14% of basic.
- Standard deduction (₹75K new / ₹50K old).
- Agniveer Corpus Fund deduction (80CCH).
- Deduction on family pension under section 57.
Common mistakes
- Comparing on gross tax only. Surcharge cap (25% under new vs 37% under old) can make a large difference above ₹2 crore income.
- Locking in old regime without 12-IEA for business income. Self-employed taxpayers can switch back only once in their lifetime.
- Double-counting standard deduction. It's applied once, not per employer.
- Ignoring future deductions. A home loan you'll take next year could flip the math — run the comparison annually.
Related calculators and reading
See also: Income Tax Calculator, HRA Calculator, Salary Calculator, NPS Calculator, glossary: Section 80C.
Common questions about Old vs New
Which regime is better for me?+
If your total deductions (HRA + 80C + 80D + home loan interest + NPS) exceed roughly ₹3.75 lakh, the old regime saves more. Below that, the new regime wins. Budget 2025's ₹60K rebate makes the new regime extremely attractive for most middle-income salaried employees.
Can I switch regimes every year?+
Yes, if you are salaried. Just declare your choice to your employer at the start of the year or choose while filing ITR. However, business owners and professionals with Section 44ADA income can switch to new regime only once — switching back to old is not allowed.
Does HRA exemption still work in the new regime?+
No. HRA exemption is only allowed under the old tax regime. If you pay significant rent in a metro city, this alone can make the old regime save more tax.
At what income is the new regime always better?+
For income up to ₹12 lakh, the new regime is unbeatable due to the ₹60K rebate — your tax is zero. For ₹12L-15L with under ₹3L deductions, new regime still wins by ₹10-20K annually.
How does the tax savings change at different income levels?+
At ₹8L salary: new regime wins by ~₹30K (zero vs ~₹30K tax). At ₹15L salary with max deductions: old regime may win by ~₹15K. At ₹25L salary with max deductions: old regime may win by ~₹40K. At ₹50L+ (surcharge zone): old regime more attractive because higher tax rates amplify deduction value.
Does home loan interest deduction still work?+
Section 24(b) home loan interest (up to ₹2L) is only available in the old regime for a self-occupied home. In the new regime, only let-out property interest is allowed (and net loss is not set off against salary).
If I choose the old regime, can I still claim the ₹75,000 standard deduction?+
No — old regime has a ₹50,000 standard deduction, not ₹75,000. The ₹75,000 figure is new-regime-only.
What happens to 80C investments if I move to the new regime?+
Your existing PPF, ELSS, life insurance policies continue — you simply lose the tax deduction. PPF continues earning interest tax-free. ELSS units still follow the 3-year lock; new investments will not get 80C benefits under new regime.