Old vs New Tax Regime India

Old Regime slabs (FY 2026-27): 0% up to ₹2.5L, 5% from ₹2.5L–₹5L, 20% from ₹5L–₹10L, 30% above ₹10L. Standard deduction: ₹50,000. Deductions available: 80C (₹1.5L), HRA, 80D, home loan interest, NPS, LTA.

New Regime slabs (FY 2026-27, default): 0% up to ₹4L, 5% from ₹4L–₹8L, 10% from ₹8L–₹12L, 15% from ₹12L–₹16L, 20% from ₹16L–₹20L, 25% from ₹20L–₹24L, 30% above ₹24L. Standard deduction: ₹75,000. Most other deductions (80C, HRA, 80D) are not allowed.

The break-even point — where both regimes result in equal tax — depends on your income. At a ₹15 lakh gross salary it sits at roughly ₹5 lakh of deductions beyond the standard deduction, and it is higher still for lower incomes. If your deductions exceed your personal break-even, the old regime may be more beneficial. Use ToolsDock's Income Tax Calculator to compare both regimes for your exact income.

Gross salary ₹10 lakh. New regime: taxable income is ₹9.25 lakh after the ₹75,000 standard deduction, which is under the ₹12 lakh rebate limit, so tax is nil. Old regime with ₹1.5 lakh 80C: taxable income is ₹8 lakh and tax is about ₹75,400 including cess. The new regime is clearly better.

Gross salary ₹15 lakh. New regime tax is about ₹97,500 including 4% cess. Even in the old regime with ₹3.5 lakh of deductions, tax is about ₹1,48,000, so the new regime still wins. The old regime only takes the lead once total deductions are very large, roughly ₹5 lakh and above at this income.

People who combine several large deductions, for instance a home loan with interest near the ₹2 lakh limit, high HRA exemption, full 80C and a sizeable 80D premium, can find the old regime ahead. Senior citizens with large medical premiums and people with significant NPS contributions can also gain.

Everyone else, and especially people who do not claim many deductions, will usually find the new regime cheaper and simpler. The only reliable way to know is to run both in the Income Tax Calculator.

Salaried taxpayers tell their employer which regime to use for TDS at the start of the year, but the final choice is made when filing the return, and they can switch every year. Taxpayers with business income have tighter rules on switching back to the old regime. The new regime is the default if you make no choice.

Compare the two properly before investing just to save tax. Locking money into 80C products to claim a deduction makes little sense if the new regime already gives you a lower bill. For a short overview see our old vs new regime comparison.