Old Tax Regime —
The Deductions Regime
The old-regime slabs for FY 2025-26, the deductions and exemptions it keeps that the new regime drops, and exactly when opting for it still saves you more tax.
The old tax regime keeps the pre-2020 slabs — Nil up to Rs 2.5 lakh, 5%, 20% and 30% — and, in return, lets you claim the full set of deductions and exemptions: 80C, 80D, HRA, LTA and home-loan interest under Section 24(b). It is now optional — the new regime is the default from FY 2023-24, so you must actively opt in. The Section 87A rebate here makes income up to Rs 5 lakh tax-free (against Rs 12 lakh in the new regime). It generally wins when your total deductions are large.
From FY 2023-24 the new regime applies automatically. Salaried taxpayers can pick the old regime each year while filing; those with business or professional income must file Form 10-IEA to opt out of the new regime, and switching back is restricted. Choose only after comparing both.
Old Tax Regime Slabs — FY 2025-26
Old-regime slabs are unchanged for AY 2026-27; Budget 2025 revised only the new regime. Senior and super-senior citizens get a higher basic exemption.
| Income Slab | Below 60 | Senior (60–79) | Super Senior (80+) |
|---|---|---|---|
| Up to Rs 2,50,000 | Nil | Nil | Nil |
| Rs 2,50,001 – 3,00,000 | 5% | Nil | Nil |
| Rs 3,00,001 – 5,00,000 | 5% | 5% | Nil |
| Rs 5,00,001 – 10,00,000 | 20% | 20% | 20% |
| Above Rs 10,00,000 | 30% | 30% | 30% |
Plus 4% Health & Education Cess on tax. Surcharge: 10% above Rs 50L, 15% above Rs 1cr, 25% above Rs 2cr, 37% above Rs 5cr (the 37% top rate applies only in the old regime; the new regime caps surcharge at 25%). Basic exemption: Rs 3L for seniors, Rs 5L for super-seniors.
A Section 87A rebate makes tax zero for net taxable income up to Rs 5 lakh in the old regime (rebate up to Rs 12,500). Above that, the slab tax applies in full. Compare with the current income-tax slabs under both regimes.
Old vs New Regime — What You Gain and Give Up
The old regime is the deductions regime: higher slab rates, but you shrink taxable income with 80C, 80D, HRA and home-loan interest. The new regime is the simplicity regime: lower slabs and a bigger rebate, but almost no deductions.
Old regime — deductions kept
- Slabs Nil / 5% / 20% / 30% (breaks at 2.5L, 5L, 10L)
- Full 80C Rs 1.5L, 80D, 80CCD(1B), 24(b) home-loan interest
- HRA and LTA exemptions allowed
- Standard deduction Rs 50,000 (salaried)
- 87A rebate up to Rs 5L taxable income
- Best when total deductions are high
New regime (default) — few deductions
- Slabs 0/5/10/15/20/25/30% (0–4L nil, up to >24L)
- 80C, 80D, HRA, 24(b) NOT available
- Only 80CCD(2) employer NPS & 80JJAA allowed
- Standard deduction Rs 75,000 (salaried)
- 87A rebate up to Rs 12L — nil tax to ~Rs 12.75L salaried
- Simpler — best with few deductions
Do not commit to 80C investments and then find the new regime saves more. With modest deductions, the new regime's lower rates, Rs 75,000 standard deduction and Rs 12 lakh 87A rebate often beat the old regime. Run both with a regime calculator first.
Not sure which regime is cheaper for your income?
Compare with an expert →Key Deductions Retained in the Old Regime
These deductions and exemptions are available only if you opt for the old regime. Home-loan interest under Section 24(b) and the 80C principal are the big levers for borrowers.
| Section | Deduction | Max Limit |
|---|---|---|
| Standard deduction | Salary / pension earners | Rs 50,000 |
| Section 80C | PPF, ELSS, LIC, EPF, home-loan principal, tuition | Rs 1,50,000 |
| Section 80CCD(1B) | Extra NPS contribution | Rs 50,000 |
| Section 80D | Health-insurance premium | Rs 25,000–1,00,000 |
| Section 24(b) | Home-loan interest (self-occupied) | Rs 2,00,000 |
| Section 80EEA | Additional first-home loan interest | Rs 1,50,000* |
| HRA — 10(13A) | House Rent Allowance (metro 50% / non-metro 40%) | Actual exempt |
| Section 80E | Education-loan interest (8 years) | No cap |
| Section 80G | Donations to approved funds | 50–100% |
| LTA — 10(5) | Leave Travel Allowance (2 trips / 4 years) | Actual fare |
* 80EEA is for loans sanctioned within the notified window and where 24(b) is exhausted; check current eligibility on the portal. Home-loan interest on a let-out property has no Rs 2L cap; stamp duty & registration qualify under 80C in the year of purchase.
The principal of a home-loan EMI is 80C (within Rs 1.5 lakh); the interest is Section 24(b), up to Rs 2 lakh for a self-occupied house and uncapped for a let-out one. Pre-construction interest is claimed in five equal annual instalments. See our home-loan tax benefit guide.
When the Old Regime Still Wins
Broadly, the old regime beats the new when your deductions beyond the standard deduction are large — typically once 80C, 80D, HRA and Section 24(b) home-loan interest together clear roughly Rs 3.5–4 lakh at Rs 12–15 lakh income. Below that, the new regime's lower rates usually win.
Old regime likely saves more if
- You pay home-loan interest near Rs 2 lakh under 24(b)
- You claim substantial HRA on rented accommodation
- You fully use 80C plus 80D and 80CCD(1B)
- Combined deductions beyond std. deduction exceed ~Rs 3.75 lakh
New regime is usually better if
- You have few or no deductions to claim
- You do not have a home loan or pay rent
- Your salaried income is at or below ~Rs 12.75 lakh
- You prefer simplicity over deduction paperwork
Want us to run both regimes and file whichever saves you more?
Get ITR Filing Help →Old Tax Regime — Frequently Asked Questions
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