New Regime Slabs (FY 2025-26)
| Income Slab | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3L – ₹7L | 5% |
| ₹7L – ₹10L | 10% |
| ₹10L – ₹12L | 15% |
| ₹12L – ₹15L | 20% |
| Above ₹15L | 30% |
Tax rebate u/s 87A: Zero tax up to ₹12L income (after standard deduction of ₹75K, effectively ₹12.75L gross income)
Old Regime Slabs (FY 2025-26)
| Income Slab | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2.5L – ₹5L | 5% |
| ₹5L – ₹10L | 20% |
| Above ₹10L | 30% |
Tax rebate u/s 87A: Zero tax up to ₹5L income. Standard deduction: ₹50,000 for salaried.
The Big Difference: Deductions Available
This is where the two regimes diverge most sharply. The old regime allows you to reduce your taxable income through a long list of deductions. The new regime trades all these for lower slab rates and simplicity.
| Deduction | Max Amount | Old Regime | New Regime |
|---|---|---|---|
| Standard Deduction | ₹50K / ₹75K | ✓ ₹50K | ✓ ₹75K |
| 80C (PPF, ELSS, LIC, etc.) | ₹1,50,000 | ✓ | ✗ |
| HRA Exemption | Varies | ✓ | ✗ |
| Home Loan Interest (24b) | ₹2,00,000 | ✓ | ✗ |
| 80D (Health Insurance) | ₹25K – ₹1L | ✓ | ✗ |
| 80CCD(1B) NPS extra | ₹50,000 | ✓ | ✗ |
| LTA (Leave Travel Allowance) | Varies | ✓ | ✗ |
| 80G (Donations) | Varies | ✓ | ✗ |
Break-Even Analysis: When Does Old Regime Win?
The old regime becomes better when your total deductions exceed a certain threshold — the break-even point depends on your income level. Here's a simplified guide:
Break-Even Deduction Needed to Prefer Old Regime
| Gross Salary (CTC) | Min Deductions Needed | Verdict |
|---|---|---|
| Up to ₹7 lakh | N/A (new regime = 0 tax) | New Regime |
| ₹7L – ₹10L | ~₹2.5L+ | Case-by-case |
| ₹10L – ₹15L | ~₹3.75L+ | Often Old Regime |
| ₹15L – ₹20L | ~₹4.25L+ | Old if HRA + HL |
| Above ₹20L | ~₹5L+ | Old Regime typically |
Real Example: ₹12 Lakh Salary
Let's compare a salaried employee with gross income of ₹12 lakh and typical deductions:
New Regime
Old Regime (with deductions)
At ₹12L with these typical deductions, both regimes result in similar tax. Old regime wins if deductions are higher (e.g., home loan interest or higher HRA). New regime wins if deductions are minimal.
Who Should Choose the New Regime?
- Salary below ₹7.75 lakh (effectively zero tax under new regime)
- No home loan, minimal 80C investments, living in own house (no HRA)
- Want simplicity — no need to collect proofs, submit declarations
- Fresher employees early in career who haven't built investment habits yet
- Anyone who finds the new regime math favorable after using our calculator
Who Should Choose the Old Regime?
- Salary above ₹15 lakh with a home loan, HRA, and 80C investments in place
- Metro residents paying high rent (HRA exemption can be ₹1–2 lakh+)
- Those with home loan interest deduction of ₹2 lakh under Section 24b
- Senior professionals with large health insurance premiums (80D)
- Anyone whose total deductions exceed the break-even threshold for their income
The Practical Tip: Use Our Calculator First
The math is individual — your answer depends on your exact salary structure, HRA, rent paid, and investment pattern. Don't guess. Use our Income Tax Calculator which computes both regimes side-by-side instantly and tells you exactly which saves more for your specific income.
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