Latest slabs, rebates, deductions and side-by-side calculations for salaried, freelancers, professionals and business owners — with a decision framework that ends the regime confusion forever.
Every Indian taxpayer now stands at the same fork in the road every April — should you file under the New Tax Regime or stick with the Old? The Finance Act 2023 made the New Regime the default. The Finance Act 2025 sweetened it further by raising the rebate threshold to ₹12 lakh and adding a ₹75,000 standard deduction. For AY 2026-27 (FY 2025-26), the choice has become more nuanced — not less. This is the most exhaustive, calculation-driven comparison you will find in 2026: side-by-side slabs, ten real taxpayer profiles (salaried, freelancer, doctor, business owner, senior citizen, NRI), the exact break-even points, and a four-step decision framework you can apply in under five minutes. By the time you finish reading, you will know — with certainty — which regime saves you more, why, and how to switch correctly without losing future flexibility.
Three changes drive almost every regime decision this year:
Marginal relief is available beyond ₹12 lakh so that someone earning ₹12,10,000 doesn't suddenly pay ₹61,000 in tax. The relief caps additional tax at the incremental income above ₹12 lakh.
| Income slab | Tax rate | Tax on this slab |
|---|---|---|
| Up to ₹4,00,000 | Nil | ₹0 |
| ₹4,00,001 – ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 – ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 – ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 – ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 – ₹24,00,000 | 25% | ₹1,00,000 |
| Above ₹24,00,000 | 30% | — |
Add 4% Health & Education Cess on the total tax in every slab. Surcharge applies once total income crosses ₹50 lakh, but the maximum surcharge under the New Regime is capped at 25% (vs 37% under the Old Regime for income above ₹5 crore).
| Income slab | Below 60 yrs | 60–80 yrs (Senior) | 80+ yrs (Super Senior) |
|---|---|---|---|
| Up to ₹2,50,000 | Nil | Nil | Nil |
| ₹2,50,001 – ₹3,00,000 | 5% | Nil | Nil |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% | Nil |
| ₹5,00,001 – ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
Old Regime preserves higher exemption limits for senior citizens — a meaningful advantage if a senior also has ≥₹2L of 80C + 80D + 80TTB deductions.
Salaried taxpayers and pensioners receive a flat ₹75,000 standard deduction under the New Regime (₹50,000 under Old). Combined with the ₹12 lakh rebate, this means a salaried employee earning up to ₹12,75,000 pays ZERO income tax under the New Regime — a scenario that simply didn't exist three years ago.
If you are salaried with CTC between ₹10L and ₹13L and have weak deduction discipline, the New Regime is almost always your answer. Don't even spreadsheet it.
| Gross income (salaried, no deductions) | Old Regime tax | New Regime tax | Saving in New |
|---|---|---|---|
| ₹5,00,000 | ₹0 (87A) | ₹0 (87A) | — |
| ₹7,50,000 | ₹54,600 | ₹0 (87A) | ₹54,600 |
| ₹10,00,000 | ₹1,06,600 | ₹0 (87A) | ₹1,06,600 |
| ₹12,75,000 | ₹1,79,400 | ₹0 (87A) | ₹1,79,400 |
| ₹15,00,000 | ₹2,49,600 | ₹97,500 | ₹1,52,100 |
| ₹18,00,000 | ₹3,43,200 | ₹1,71,600 | ₹1,71,600 |
| ₹20,00,000 | ₹4,05,600 | ₹2,18,400 | ₹1,87,200 |
| ₹25,00,000 | ₹5,61,600 | ₹3,46,000 | ₹2,15,600 |
| ₹30,00,000 | ₹7,17,600 | ₹4,98,000 | ₹2,19,600 |
| ₹50,00,000 | ₹13,41,600 | ₹11,22,000 | ₹2,19,600 |
All figures include 4% cess and assume zero Chapter VI-A deductions. The picture changes once Old-Regime deductions kick in — see the next section.
Riya, 29, marketing manager in Bangalore. CTC ₹15,00,000. Rent ₹35,000/month. EPF ₹60,000/yr. Term insurance + ELSS ₹50,000. Health insurance ₹25,000 (self + parents). NPS ₹50,000.
| Component | Old Regime | New Regime |
|---|---|---|
| Gross salary | ₹15,00,000 | ₹15,00,000 |
| Standard deduction | ₹50,000 | ₹75,000 |
| HRA exemption (rent − 10% basic, etc.) | ₹2,40,000 | Nil |
| 80C (EPF + ELSS + insurance) | ₹1,50,000 | Nil |
| 80D (health insurance) | ₹50,000 | Nil |
| 80CCD(1B) NPS | ₹50,000 | Nil |
| Taxable income | ₹9,60,000 | ₹14,25,000 |
| Income tax (incl. 4% cess) | ₹1,06,080 | ₹85,800 |
| Winner | — | New Regime saves ₹20,280 |
Even with ₹4.9L of deductions, Riya is still slightly better off in the New Regime — because the standard deduction increase and slab restructuring outweigh her HRA + 80C combo.
Arjun, 38, senior engineer in Pune. CTC ₹25,00,000. Owns a self-occupied flat, home loan interest ₹2,00,000/yr, principal ₹1,50,000/yr. Health insurance ₹40,000 (self + parents, parents are seniors so the cap is ₹75,000). NPS ₹50,000.
| Component | Old Regime | New Regime |
|---|---|---|
| Gross salary | ₹25,00,000 | ₹25,00,000 |
| Standard deduction | ₹50,000 | ₹75,000 |
| Section 24(b) home-loan interest | ₹2,00,000 | Nil |
| 80C (principal + EPF) | ₹1,50,000 | Nil |
| 80D (incl. senior parents) | ₹75,000 | Nil |
| 80CCD(1B) NPS | ₹50,000 | Nil |
| Taxable income | ₹19,75,000 | ₹24,25,000 |
| Income tax (incl. 4% cess) | ₹4,01,700 | ₹3,42,200 |
| Winner | — | New Regime saves ₹59,500 |
Arjun's home loan + 80C + 80D combo of ₹4.75L sounds substantial, but the New Regime still wins — because the standard deduction bump and lower slab rates have pulled the break-even much higher than before.
Saurabh, 33, freelance UX designer. Gross receipts ₹50,00,000. Under Section 44ADA, presumptive income = 50% = ₹25,00,000. He also invests ₹1.5L in ELSS, pays ₹40,000 health insurance and contributes ₹50,000 to NPS.
| Component | Old Regime | New Regime |
|---|---|---|
| Presumptive income (44ADA) | ₹25,00,000 | ₹25,00,000 |
| 80C | ₹1,50,000 | Nil |
| 80D | ₹40,000 | Nil |
| 80CCD(1B) | ₹50,000 | Nil |
| Taxable income | ₹22,60,000 | ₹25,00,000 |
| Income tax (incl. cess) | ₹4,93,584 | ₹3,58,800 |
| Winner | — | New Regime saves ₹1,34,784 |
Important: a 44ADA professional choosing the New Regime now and wanting to switch back to the Old Regime later can do so only ONCE in a lifetime via Form 10-IEA. After that the door shuts. See our income tax return filing service if you need help with the switch.
Pooja runs a Tally-based bookkeeping practice as a sole proprietor. Turnover ₹1.4 crore. Presumptive income u/s 44AD = 6% (digital receipts) = ₹8,40,000. No major deductions. New Regime gives her ₹0 tax (rebate). Old Regime: ₹83,200. The New Regime is the obvious choice.
Mr. Iyer, 67, retired banker. Pension ₹6,00,000. Bank FD interest ₹4,00,000. Health insurance ₹50,000. 80TTB savings/FD interest ₹50,000. Donations 80G ₹50,000. Medical 80DDB ₹40,000.
| Component | Old Regime | New Regime |
|---|---|---|
| Gross income | ₹10,00,000 | ₹10,00,000 |
| Standard deduction (pension) | ₹50,000 | ₹75,000 |
| 80D | ₹50,000 | Nil |
| 80TTB | ₹50,000 | Nil |
| 80G | ₹50,000 | Nil |
| 80DDB | ₹40,000 | Nil |
| Taxable income | ₹7,60,000 | ₹9,25,000 |
| Income tax (incl. cess) | ₹65,520 | ₹0 (rebate) |
| Winner | — | New Regime saves ₹65,520 |
Even seniors with substantial 80D + 80TTB + 80G + 80DDB deductions are now usually better off in the New Regime — because the ₹12L rebate dwarfs almost any combination of Chapter VI-A claims under ₹10L income.
At what level of deductions does the Old Regime start beating the New? Use this rule of thumb:
| Gross income | Break-even Old-Regime deductions |
|---|---|
| ₹10,00,000 | Impossible — New Regime always wins (income ≤ ₹12L rebate) |
| ₹12,75,000 | Impossible — New Regime gives ₹0 tax via rebate |
| ₹15,00,000 | ≈ ₹3,75,000 |
| ₹18,00,000 | ≈ ₹4,25,000 |
| ₹20,00,000 | ≈ ₹4,50,000 |
| ₹25,00,000 | ≈ ₹4,75,000 |
| ₹50,00,000 | ≈ ₹5,00,000 |
| ₹1,00,00,000 | ≈ ₹5,25,000 |
Translation: unless your annual deductions (HRA + 80C + 80D + 80CCD(1B) + 24(b) + 80E etc. combined) reliably exceed ₹4–5 lakh, the New Regime almost certainly wins for you.
Salaried (only salary income):
Business / professional income (44AD, 44ADA, normal business):
No, but it's better for ~80% of taxpayers in 2026, especially salaried and presumptive-income earners. It's not better for taxpayers with very high deductions (₹4.5L+) or large home-loan interest on self-occupied property combined with HRA loss.
Salaried (only salary income): yes, every year. Business / professional income earners: only once in a lifetime via Form 10-IEA.
Full rebate of tax payable if total income ≤ ₹12,00,000 (₹12,75,000 effectively for salaried after standard deduction). Marginal relief applies just above ₹12L.
Yes. Family pensioners also get a deduction of ₹25,000 or 1/3rd of pension under the New Regime, in addition to the standard deduction on salary/pension.
Yes. House Rent Allowance exemption under Section 10(13A) is not available under the New Regime.
Only for a let-out property (set off against rental income). Interest on self-occupied house property is NOT deductible under the New Regime.
Yes. Up to 14% of basic salary for government employees and 10% for others — fully deductible in both regimes.
Yes, but only once in your lifetime. After that one switch back, you are locked into either regime — choose carefully.
Yes. The maximum surcharge is 25% under the New Regime (vs 37% under Old) for income above ₹5 crore. High earners almost always benefit from the New Regime for this reason alone.
Rebate u/s 87A is NOT available against tax on long-term capital gains on listed equity u/s 112A. Plan equity sales carefully.
In 2026, the New Regime almost always wins for seniors under ₹15L income because of the ₹12L rebate. Above ₹15L with heavy 80D + 80TTB + 80DDB, the Old Regime may edge ahead — model both.
No. Leave Travel Allowance exemption u/s 10(5) is not available under the New Regime.
Yes. The regime declared to your employer affects TDS only. At the time of ITR filing you can choose the more beneficial regime; any excess TDS is refunded.
No. Section 80G is not available under the New Regime.
ELSS gains are still tax-efficient (LTCG up to ₹1.25L exempt), but the ₹1.5L 80C deduction is gone. Many investors continue ELSS for wealth creation, not tax.
Yes. NRIs can opt for either regime, but they cannot claim the rebate u/s 87A in either.
Your return defaults to the New Regime. You cannot claim Old-Regime deductions for that AY. The Form 10-IEA must be filed BEFORE the ITR due date u/s 139(1).
No. Standard deduction is available only against salary or pension income.
No. Section 80U deduction is not available under the New Regime — a real concern for persons with disability; they should usually choose the Old Regime.
Yes. The government has explicitly stated the New Regime is the preferred path forward. Expect future changes to enhance it further while the Old Regime is gradually phased out for new entrants.
For AY 2026-27, the New Tax Regime is the default winner for most Indian taxpayers — but 'most' is not 'all'. The right answer depends entirely on your real, claimable deductions and your income bracket. Use the break-even table, the four-step framework, and the case studies above to make a numbers-driven decision instead of an emotional one. If you're still on the fence, our team at Taxpex computes both regimes on your actual figures — so you never overpay.
Senior contributor at Taxpex Consultancy. Reviewed by a practising Chartered Accountant. Published on 8 June 2026 · Updated on 8 June 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 2025-26Most 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 2025-26No. HRA under Section 10(13A) is available only in the old regime.
via HRA Calculator