Old vs New Tax Regime
FY 2025-26 (AY 2026-27) and FY 2026-27 (AY 2027-28) · enter your income and deductions to see which regime costs you less.
Last updated: 5 September 2026How the comparison works
The two regimes are not variations on a theme. They are different bargains. The new regime gives you wide, gently-rising slabs and a very large section 87A rebate, but takes away nearly every deduction. The old regime keeps the deductions but taxes you at 20% from ₹5 lakh and 30% from ₹10 lakh, which are brutal thresholds by 2026 standards.
The calculator above runs both computations on the same gross income. On the new-regime side it subtracts the ₹75,000 standard deduction, applies the slabs, applies the 87A rebate up to ₹12 lakh of taxable income, applies marginal relief just above that line, and adds 4% cess. On the old-regime side it subtracts the ₹50,000 standard deduction plus whatever deductions you enter, applies the old slabs, zeroes the tax if taxable income is ₹5 lakh or less (the ₹12,500 rebate exactly cancels the tax at that point), and adds 4% cess.
Everything hinges on one number: how much you can actually deduct. Not how much you would like to, but how much you will genuinely claim and be able to substantiate — rent receipts with a landlord PAN if the annual rent exceeds ₹1 lakh, actual 80C investments made before 31 March, a real health insurance premium.
Slabs side by side
| New regime band | Rate | Old regime band | Rate |
|---|---|---|---|
| Up to ₹4,00,000 | Nil | Up to ₹2,50,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% | ₹2,50,001 – ₹5,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% | ₹5,00,001 – ₹10,00,000 | 20% |
| ₹12,00,001 – ₹16,00,000 | 15% | Above ₹10,00,000 | 30% |
| ₹16,00,001 – ₹20,00,000 | 20% | — | — |
| ₹20,00,001 – ₹24,00,000 | 25% | — | — |
| Above ₹24,00,000 | 30% | — | — |
| Feature | New regime | Old regime |
|---|---|---|
| Standard deduction | ₹75,000 | ₹50,000 |
| Section 87A rebate | Up to ₹60,000; taxable income ≤ ₹12 lakh | Up to ₹12,500; taxable income ≤ ₹5 lakh |
| Marginal relief above the rebate line | Yes | No |
| Health & Education Cess | 4% | 4% |
| Maximum surcharge | 25% | 37% |
| Default for FY 2025-26 onward | Yes | Opt-in |
Break-even deductions table
This is the table most people actually want. For a salaried person, it shows the minimum old-regime deductions (over and above the ₹50,000 standard deduction) needed for the old regime to match the new one. Deduct less than this and the new regime wins.
| Gross salary | New regime tax | Deductions needed to break even | Realistic? |
|---|---|---|---|
| ₹10,00,000 | ₹0 | ₹4,50,000 | Very hard |
| ₹15,00,000 | ₹97,500 | ₹5,43,750 | Hard |
| ₹20,00,000 | ₹1,92,400 | ₹7,08,333 | Possible with HRA + home loan |
| ₹30,00,000 | ₹4,75,800 | ₹8,00,000 | Achievable in a metro |
Read that first row carefully. At ₹10 lakh the new regime charges nothing at all, so the old regime can only tie, never win — and to tie you would need ₹4.5 lakh of deductions to push taxable income down to ₹5 lakh. At ₹15 lakh you need ₹5.43 lakh, which means maxing 80C at ₹1.5 lakh, claiming the full ₹2 lakh of self-occupied home loan interest, ₹25,000 of 80D, and still finding another ₹1.7 lakh of HRA exemption. Most people do not get there.
The picture flips as income rises. At ₹30 lakh the required ₹8 lakh sounds large but is quite normal for someone renting in Mumbai or Bengaluru: an HRA exemption of ₹4-5 lakh on its own does most of the work. In practice: below roughly ₹15 lakh the new regime wins for almost everyone; above ₹20 lakh, run the numbers, because a big HRA claim or a let-out property can tip it.
Which deductions survive in the new regime
The new regime is not deduction-free. Four things carry over, and the second one is genuinely valuable.
- Standard deduction — ₹75,000. Higher than the old regime's ₹50,000, and it applies to pension income too.
- Employer's NPS contribution, section 80CCD(2) — up to 14% of basic salary. This is the only large deduction left standing, and it is available in both regimes. On a ₹15 lakh package with ₹7.5 lakh of basic, that is ₹1.05 lakh off your taxable income. It costs you nothing if HR restructures your CTC to route part of it into NPS instead of paying it as cash. Ask.
- Home loan interest on a let-out property, section 24(b). Interest on a property you rent out is still deductible against the rental income. Interest on the house you live in is not. This asymmetry is why some people with two properties still do better in the old regime.
- Employer contributions to EPF and superannuation within the statutory limits, and gratuity and leave encashment exemptions on retirement, are unaffected by regime choice.
What you lose: 80C in full (PPF, ELSS, life insurance premium, principal repayment, tuition fees), 80D health insurance premium, HRA exemption under section 10(13A), leave travel allowance, 80E education loan interest, 80G donations, 80TTA and 80TTB interest deductions, 80DD and 80U disability deductions, 80CCD(1B)'s extra ₹50,000 for your own NPS contribution, and the ₹2 lakh self-occupied home loan interest deduction.
Two worked examples
Example 1 — Salary ₹15,00,000, home loan and 80C
| Step | New regime | Old regime |
|---|---|---|
| Gross salary | ₹15,00,000 | ₹15,00,000 |
| Standard deduction | − ₹75,000 | − ₹50,000 |
| Other deductions (80C ₹1,50,000 + home loan interest ₹2,00,000 + 80D ₹25,000) | ₹0 | − ₹3,75,000 |
| Taxable income | ₹14,25,000 | ₹10,75,000 |
| Tax before cess | ₹93,750 | ₹1,35,000 |
| Cess @ 4% | ₹3,750 | ₹5,400 |
| Total tax | ₹97,500 | ₹1,40,400 |
The new regime wins by ₹42,900, despite ₹3.75 lakh of perfectly real deductions. That is the whole story of the new regime at middle incomes: the old rates are simply too steep to overcome.
Example 2 — Salary ₹30,00,000, metro rent plus a let-out flat
| Step | New regime | Old regime |
|---|---|---|
| Gross salary | ₹30,00,000 | ₹30,00,000 |
| Standard deduction | − ₹75,000 | − ₹50,000 |
| HRA exemption | ₹0 | − ₹4,80,000 |
| 80C + 80D + 80CCD(1B) | ₹0 | − ₹2,50,000 |
| Interest on let-out flat (capped set-off) | ₹0 | − ₹2,00,000 |
| Taxable income | ₹29,25,000 | ₹20,20,000 |
| Tax before cess | ₹4,57,500 | ₹4,18,500 |
| Cess @ 4% | ₹18,300 | ₹16,740 |
| Total tax | ₹4,75,800 | ₹4,35,240 |
Here the old regime wins by ₹40,560. Note what it took: ₹9.3 lakh of deductions, of which more than half is HRA. Stop renting, or move to a city where rent is a third of Mumbai's, and this person flips straight back to the new regime.
Switching regimes and Form 10-IEA
The new regime is the default. You do not have to do anything to be in it.
- If you have only salary, pension, house property, capital gains or other income — no business or professional income — you can choose your regime afresh every single year, right inside the ITR form, up to the filing due date. Choose old this year, new next year, old again the year after: perfectly allowed.
- If you have business or professional income, you must file Form 10-IEA on the e-filing portal on or before the due date for filing your return, to opt out of the new regime. It is a short online form and it generates an acknowledgement number that you then quote in the ITR.
- The catch for business income: having opted out, you can return to the new regime once, and after that you are locked into the new regime for as long as you have business income. Treat the old regime as a one-way door if you are self-employed.
- Your declaration to your employer is not your final choice. Telling HR "old regime" in April only changes how TDS is deducted. You can still file under the other regime and settle the difference as a refund or a payment.
What this calculator does not model
- Senior citizen basic exemptions. The old regime gives ₹3 lakh of exemption from age 60 and ₹5 lakh from age 80. This calculator uses the standard ₹2.5 lakh, so if you are a senior citizen the old-regime tax shown is slightly overstated.
- Surcharge above ₹50 lakh of taxable income. The old regime's maximum surcharge of 37% versus the new regime's 25% cap matters a great deal for very high earners and pushes them decisively towards the new regime.
- Capital gains, which have their own rates and their own exemption limits and should be computed separately.
- Section 80CCD(2) employer NPS, which is available in both regimes and therefore cancels out of the comparison — but do include it as a deduction in both when you sit down with your CA.
FAQ
- Which regime is better for most salaried people?
- The new one. Below about ₹15 lakh of salary you would need deductions that most people simply cannot produce. The old regime becomes competitive only above ₹20 lakh, and mainly when a large HRA exemption is in play.
- Do the slabs change for FY 2026-27?
- No. Budget 2026 left the new regime slabs, the ₹75,000 standard deduction and the ₹12 lakh rebate threshold as they were, and the old regime is unchanged too. This comparison holds for both FY 2025-26 and FY 2026-27.
- Does the old regime have marginal relief too?
- Not for the 87A rebate. If your old-regime taxable income is ₹5,00,100, you lose the entire ₹12,500 rebate and pay full tax on the whole amount. Marginal relief at the rebate threshold exists only in the new regime. Both regimes do have marginal relief on the surcharge thresholds at ₹50 lakh and ₹1 crore.
- Can I change my mind after telling my employer?
- Yes. Your declaration to HR only sets your monthly TDS. The regime you actually file under is decided in the ITR itself, and any difference comes back as a refund or is paid as self-assessment tax.
- What is Form 10-IEA and do I need it?
- It is the online form that lets a taxpayer with business or professional income opt out of the new regime. Salaried people without business income do not need it — they just tick the option in the ITR. File it before the return due date.
- Is HRA really gone in the new regime?
- The exemption is. Your employer can still pay you an HRA component, but it is fully taxable under the new regime. For someone paying ₹40,000 a month in metro rent, that is easily ₹4 lakh of lost exemption, which is the single biggest reason to check the old regime.
- Should I stop my 80C investments if I am in the new regime?
- Stop the ones you only held for the deduction, such as a low-return endowment policy. Keep the ones that are good products on their own: PPF at a fixed sovereign-backed rate and ELSS as equity exposure both stand up without the tax break, though ELSS loses its main advantage over an ordinary index fund.
- Is my data stored?
- No. Both regimes are computed in JavaScript in your browser. Nothing is uploaded.