A side-by-side breakdown of deductions, slab rates and break-even points so you pick the regime that actually leaves more money in your pocket this year.
The new tax regime is the default for FY 2025–26 — but for many salaried professionals, the old regime still wins by ₹30,000 to ₹2,50,000+ a year. The right answer depends on a single question: how much can you legitimately deduct? This piece gives you the slab rates, the comparison, the break-even math and four worked examples.
| Income slab | Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
| Income slab | Rate |
|---|---|
| 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% |
| Deduction / exemption | Old | New |
|---|---|---|
| Standard deduction (salary) | ₹50,000 | ₹75,000 |
| 80C (PPF, ELSS, LIC, EPF) | ₹1.5L | — |
| 80D (medical insurance) | Up to ₹1L | — |
| 80CCD(1B) (NPS extra) | ₹50K | — |
| 80CCD(2) (employer NPS) | 10% / 14% | 10% / 14% |
| HRA exemption | Yes | — |
| LTA exemption | Yes | — |
| Home loan interest (self-occupied) | ₹2L | — |
| Home loan interest (let-out) | Full | Full |
| 87A rebate | Up to ₹12,500 (income ≤ ₹5L) | Up to ₹25,000 (income ≤ ₹7L) |
Compute total legitimate deductions you can claim under the old regime. If they exceed the threshold below for your income bracket, old wins. Below it, new wins.
| Annual income | Break-even deductions |
|---|---|
| ₹7,50,000 | ₹2,00,000 |
| ₹10,00,000 | ₹2,62,500 |
| ₹12,50,000 | ₹3,12,500 |
| ₹15,00,000 | ₹3,75,000 |
| ₹20,00,000 | ₹4,25,000 |
| ₹50,00,000 | ₹4,87,500 |
Standard deduction ₹50K (old) or ₹75K (new). No 80C contributions yet, no HRA (lives with parents). Old: tax ≈ ₹62,400. New: tax ≈ ₹35,000. New wins by ₹27,400.
HRA ₹2.4L, 80C ₹1.5L, 80D ₹25K, home loan interest ₹2L = total deductions ₹6.15L + ₹50K standard. Old: tax ≈ ₹78,000. New: tax ≈ ₹1,42,500. Old wins by ₹64,500.
80C ₹1.5L + 80D ₹50K + HRA ₹3L + 80CCD(1B) ₹50K = ₹5.5L + ₹50K standard. Old: tax ≈ ₹3.5L. New: tax ≈ ₹3.8L. Old wins by ₹30,000.
Only 80C ₹1.5L + 80D ₹50K + 80CCD(1B) ₹50K = ₹2.5L + ₹50K standard. Old: ₹8.4L. New: ₹7.2L. New wins by ₹1.2L.
Run both regimes every year — your salary structure, rent, loan EMI and investment mix change. The regime that won last year may not win this year.
Salaried employees can switch between regimes every year just by selecting it in the ITR. Business or professional income holders are locked once they switch out of the old regime.
There's no 'better' regime in the abstract. There is only the regime that's better for your specific income, deductions and life stage this year. Compute both, document the working, file the lower-tax option — and revisit the decision every April.
Senior contributor at Taxpex Consultancy. Reviewed by a practising Chartered Accountant. Published on 22 April 2026 · Updated on 22 April 2026.
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The new regime is the default. You must actively opt for the old regime while filing.
via Income Tax Calculator FY 2025-26Always. We run both computations and pick the lower one for you.
via Income Tax Return FilingMost Chapter VI-A deductions (80C, 80D, 80E, HRA, LTA) are NOT available in the new regime. Only NPS employer contribution and standard deduction survive.
via Income Tax Calculator FY 2025-26A full tax rebate if your taxable income does not exceed ₹12L (new) or ₹5L (old). Effectively zero tax up to those thresholds.
via Income Tax Calculator FY 2025-26