Old vs New Tax Regime — FY 2026-27
A side-by-side comparison after Budget 2025. For most salaried Indians the new regime now wins — but there are clear exceptions. Here's the data.
Quick answer (TL;DR)
For 70%+ of salaried Indians, the new regime wins. If your total deductions (80C + 80D + HRA + home loan interest) add up to less than ~25% of your gross salary, switch to the new regime. Above 25%, run both calculations.
Tax slabs — side by side
New Regime (default)
| Slab | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Plus ₹75,000 standard deduction + ₹60,000 87A rebate up to ₹12L taxable.
Old Regime
| Slab | Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Plus ₹50,000 standard deduction + ₹12,500 87A rebate up to ₹5L taxable. 80C, 80D, HRA, 24(b) etc. available.
Worked examples
| Income | Old Regime Tax | New Regime Tax | Winner |
|---|---|---|---|
| ₹6 LPA | ₹0 (after 80C ₹1.5L + std deduction) | ₹0 (zero tax up to ₹12L) | Tie |
| ₹10 LPA | ₹52,500 (with ₹2L 80C/80D) | ₹0 (zero tax up to ₹12L) | New |
| ₹12 LPA | ₹1,12,500 | ₹0 | New (clear win) |
| ₹15 LPA | ₹1,87,500 (with ~₹3L deductions) | ₹97,500 | New |
| ₹20 LPA | ₹3,12,500 (with ~₹4L deductions) | ₹1,72,500 | New |
| ₹30 LPA | ₹6,12,500 (with ~₹4L deductions) | ₹4,02,500 | New |
| ₹50 LPA | ₹12,57,500 | ₹10,12,500 | New (most cases) |
All numbers exclude cess (4%) for simplicity. Old regime assumes typical deductions noted in brackets.
Old regime can still win if you have…
- • HRA of ₹3-5L per year (metro renter)
- • Home loan interest ₹2L per year (self-occupied)
- • Full ₹1.5L 80C utilisation (PPF, ELSS, EPF)
- • ₹50k NPS 80CCD(1B)
- • ₹25-75k 80D health insurance (self + parents)
- • ₹50k 80TTB (senior citizen interest)
Total deductions need to exceed ~₹4-5L for old regime to beat new at ₹15-20L income.
New regime wins for…
- • Anyone earning under ₹12L — zero tax
- • Young earners with low/zero deductions
- • Renters in non-metro areas with low HRA
- • Self-employed without 80C investments
- • People with employer NPS 80CCD(2) — still allowed
- • Investors maxing out equity LTCG (under ₹1.25L pa)
Frequently asked questions
What is the break-even point between old and new regime?
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Roughly: for ₹12L income — new regime always wins (zero tax). For ₹15L income — old regime needs ~₹3.75L of deductions to match new. For ₹25L income — old regime needs ~₹5L of deductions. Below ~₹50L income, new regime wins unless you have exceptionally high HRA + home loan + 80C combined.
Can I switch between regimes every year?
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Salaried with no business income: yes, switch every year while filing ITR. Business/profession income: once you opt out of the new regime, you can switch back only once in your lifetime.
What deductions are still allowed in the new regime?
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Standard deduction ₹75,000 (salaried), employer NPS contribution under 80CCD(2), gratuity (within limits), leave encashment exemption, transport allowance for disabled, and a few less-common ones. 80C, 80D, HRA, home loan interest on self-occupied — NOT allowed in new regime.
Is the new regime good for senior citizens?
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Yes for most. New regime has no separate senior citizen slab (everyone gets the same slabs), but the lower rates + ₹60k rebate up to ₹12L often beat old regime senior slabs. Old regime senior basic exemption is ₹3L (60-80) / ₹5L (80+) — useful only if you have very large 80D / 80TTB deductions.
Should freelancers / professionals choose new regime?
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Most freelancers benefit from new regime because they don't have HRA / home loan deduction setups, and they save up to ₹75k under presumptive taxation 44ADA. Compute both with our income tax calculator to be sure.
Stop guessing — run the numbers.
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