New vs Old Tax Regime
Enter your income and deductions — see which regime wins live, with exact tax under each and a slab-wise breakdown.
Applicable for FY 2026-27 (AY 2027-28) and FY 2027-28.
Old vs New — detailed breakdown
Not sure which regime suits you?
Our CA experts analyse your full income profile and pick the regime that saves the most — free.
Disclaimer: Indicative estimate for individual residents. Actual tax may vary with exemptions, capital gains and special-rate income. Rates for FY 2026-27 (AY 2027-28), carried forward to FY 2027-28.
Budget 2025 — what changed in the new regime
The new tax regime is now the default. For FY 2026-27, the rebate under Section 87A makes a resident individual pay zero tax up to ₹12 lakh of taxable income — and with the ₹75,000 standard deduction, salaried people are effectively tax-free up to ₹12.75 lakh.
When does the old regime still win?
The old regime charges higher slab rates but lets you claim 80C, 80D, HRA and home-loan interest. It beats the new regime only once your deductions are large enough to offset the rate gap. Here is roughly how much you need to claim before the old regime becomes cheaper (over and above the standard deduction).
Low income (up to ₹12.75L)
The new regime is almost always better — zero tax up to ₹12.75L via the 87A rebate. The old regime can only match this with very heavy deductions, which most people at this level do not have.
Break-even deductions
Around ₹3.75L–₹4.25L of total deductions (beyond the standard deduction) is where the old regime overtakes the new one for incomes of ₹15L–₹24L. Below that, stay on new.
Home-loan + HRA households
₹2L home-loan interest + ₹1.5L (80C) + HRA + 80D easily crosses ₹4L. For salaried people renting and repaying a home loan, the old regime frequently wins — enter your numbers above.
Very high income
The new regime caps surcharge at 25% versus 37% in the old regime, so for income above ₹2Cr the new regime has a structural advantage unless deductions are exceptional.
Income tax slabs — FY 2026-27
The new regime has lower rates but almost no deductions; the old regime has higher rates but lets you claim 80C, 80D, HRA and home-loan interest. A 4% health & education cess applies on top of tax in both regimes.
| 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% |
| 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% |
Old vs new — worked examples
What a salaried person pays under each regime. The first two take only the standard deduction; the third shows how ₹4.25L of old-regime deductions can flip the result. Enter your own numbers above to compare exactly.
Frequently asked questions
- Enter your annual gross income and pick salaried or business.
- Fill in Old Regime deductions like 80C, HRA, home loan interest, 80D and NPS.
- Click Calculate to see tax under both regimes side by side.
- Read the winner banner and effective tax rate to pick the regime that saves more.
Which regime is default for FY 2025-26?
The New Regime is the default. If you do not actively opt for the Old Regime, the New Regime applies. Salaried employees can still switch at ITR filing time.
Which tax regime is better for a person with home loan and 80C investments?
If you have a home loan interest deduction (up to Rs 2 lakh), 80C investments (Rs 1.5 lakh), HRA exemption, and other deductions totalling over Rs 3.75 lakh, the old tax regime is likely better. If your total deductions are below this threshold, the new regime with lower slab rates is advantageous.
When is the Old Regime better?
The Old Regime helps when your total deductions (80C, HRA, home loan interest, 80D and more) are large, usually above ₹3.75L to ₹5L, so the extra deductions outweigh the lower New Regime slabs.
Can I switch between old and new tax regime every year?
Salaried individuals and those without business income can switch between regimes each financial year at the time of ITR filing. Business owners can switch only once from new to old regime; once they switch back to old, they cannot return to new again in subsequent years.
Is standard deduction available in both regimes?
Yes. It is ₹75,000 for salaried and pensioners under the New Regime and ₹50,000 under the Old Regime. It is deducted from salary before applying slabs.
What deductions are available in the new tax regime?
The new regime allows: standard deduction of Rs 75,000 (salary), employer NPS contribution under Section 80CCD(2), family pension deduction of Rs 25,000, Section 80CCH (Agniveer corpus), Section 80JJAA (new employment), and Section 80LA (offshore banking units). Most other deductions including 80C, 80D, HRA, and home loan interest are not available.
Can I switch regimes every year?
Salaried individuals can switch between regimes every year while filing the ITR. Taxpayers with business income can move from Old to New only once.
Is the new tax regime better for high-income earners?
For very high incomes above Rs 5 crore, the new regime is better because the maximum surcharge is capped at 25% (versus 37% in the old regime). For income between Rs 50 lakh and Rs 5 crore, the comparison depends on the total deductions and exemptions available.
What is the break-even point for choosing old vs new tax regime?
For a salaried individual with income of Rs 15 lakh, the new regime results in lower tax if total deductions (excluding standard deduction) are below approximately Rs 2.25 lakh. At higher income levels, the break-even deduction amount increases. Use the regime comparison calculator to find your exact break-even.
Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.