What is the break-even deduction between regimes?

Under the FY 2025-26 slabs the break-even is high — you generally need total deductions of around ₹5 lakh to ₹8 lakh (rising with income) for the old regime to win. Below that the new regime is cheaper, which is why it now suits the large majority of salaried taxpayers.

Can I switch between the new and old regime every year?

Salaried individuals without business income can choose their regime afresh every financial year while filing returns. Those with business or professional income can switch back to the new regime only once after opting for the old regime.

New vs Old Tax Regime Calculator India – Which Saves More

Your Income & Deductions

Gross Annual Income

₹

₹3L₹50L

Total Deductions (old regime)

₹

₹0₹6L

Include 80C, 80D, HRA exemption, home loan interest, NPS 80CCD(1B), etc. The standard deduction (₹50K old / ₹75K new) is applied automatically.

Recommended Regime

—

You save ₹0 per year

New Regime

₹0

Taxable₹0

Std deduction₹75,000

Old Regime

₹0

Taxable₹0

Deductions₹0

Tax figures include 4% health & education cess and the Section 87A rebate (zero tax up to ₹12L taxable in new regime, ₹5L in old). Surcharge applies above ₹50L income.

New Regime Slabs (FY 2025-26)

Taxable income	Rate
Up to ₹4 lakh	Nil
₹4 – 8 lakh	5%
₹8 – 12 lakh	10%
₹12 – 16 lakh	15%
₹16 – 20 lakh	20%
₹20 – 24 lakh	25%
Above ₹24 lakh	30%

87A rebate makes income up to ₹12L tax-free. +4% cess on tax.

Old Regime Slabs (FY 2025-26)

Taxable income	Rate
Up to ₹2.5 lakh	Nil
₹2.5 – 5 lakh	5%
₹5 – 10 lakh	20%
Above ₹10 lakh	30%

87A rebate makes income up to ₹5L tax-free. +4% cess. Deductions allowed.

Senior citizens (60+) get a higher ₹3L basic exemption, and super-seniors (80+) ₹5L, under the old regime.

New Regime — at a glance

→Lower slab rates, zero tax up to ₹12L taxable income.
→₹75,000 standard deduction for salaried.
→Almost no other deductions (no 80C, HRA, home loan).
→Best for those who don't invest heavily for tax saving.

Old Regime — at a glance

→Higher slab rates but a long list of deductions.
→Claim 80C, 80D, HRA, home loan interest, NPS and more.
→₹50,000 standard deduction for salaried.
→Best for those with high rent, loans or 80C investments.

Worked Example — ₹15 Lakh Salary

Comparing a ₹15,00,000 salary for FY 2025-26 (figures include 4% cess):

New regime₹97,500

Taxable ₹14.25L (after ₹75k std deduction)

Old regime (₹1.5L 80C only)₹2,10,600

Taxable ₹13L (after ₹50k std + ₹1.5L 80C)

Here the new regime saves ₹1,13,100. The old regime would need roughly ₹5.4 lakh of total deductions just to match the new regime at this income.

Who Should Pick Which Regime?

Choose the New Regime if…

You rent-free or own your home outright, don't have a big home loan, and don't max out 80C/80D/NPS. It also means zero paperwork and no investment proofs.

Choose the Old Regime if…

You pay high rent (HRA), have a large home-loan interest deduction, and fully use 80C, 80D and the ₹50k NPS benefit — together pushing deductions past the break-even.

Run your own numbers in the calculator above — it picks the cheaper regime for you automatically.

Frequently Asked Questions

Common questions about choosing a tax regime

Which tax regime is better, new or old?

It depends on your deductions. The new regime has lower rates and zero tax up to ₹12L but almost no deductions; the old regime has higher rates but allows 80C, HRA, home loan interest and more. Large deductions favour the old regime; otherwise the new regime usually wins.

What is the break-even deduction?

Under the FY 2025-26 slabs the break-even is high — you generally need total deductions of around ₹5–8 lakh (the figure rises with income) for the old regime to win. Below that, the new regime is cheaper. This is why the new regime now suits the large majority of salaried taxpayers.

Is the standard deduction available in the new regime?

Yes — ₹75,000 in the new regime and ₹50,000 in the old regime for salaried individuals. This calculator applies it automatically.

Can I switch regimes every year?

Salaried individuals without business income can choose afresh each year. Those with business income can switch back to the new regime only once after opting for the old regime.

Is the new regime the default?

Yes. The new regime is the default. To be taxed under the old regime you must explicitly opt for it while filing your return or declaring to your employer.

Does this match the official tax?

It uses the current slab rates, 87A rebate, surcharge and 4% cess and is accurate for standard salary scenarios. For capital gains, business income or complex cases, consult a CA or use incometax.gov.in.

Is income up to ₹12 lakh really tax-free in the new regime?

Yes. For FY 2025-26 the Section 87A rebate makes a taxable income up to ₹12 lakh pay zero tax under the new regime. Add the ₹75,000 standard deduction and a salaried person earning up to ₹12.75 lakh gross pays no tax. Just above ₹12 lakh, marginal relief keeps the tax from jumping sharply.

What deductions can I still claim in the new regime?

A few survive: the ₹75,000 standard deduction, the employer's NPS contribution under Section 80CCD(2), and exemptions like gratuity and leave encashment. But the big ones — 80C, 80D, HRA, and home-loan interest on a self-occupied house — are not allowed in the new regime.

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