New Tax Regime Now Default - Compare Your Savings
India's new income tax regime is now the default for FY 2025-26. With simplified slabs but no deductions, many taxpayers wonder whether to opt for the old regime with Section 80C, HRA, and other deductions. This calculator compares both regimes side by side to show which saves you more tax.
Ready to run the numbers?
Why: The new tax regime offers lower slab rates and a higher standard deduction (₹75,000) but eliminates most deductions including 80C, 80D, HRA, LTA, and home loan interest. For salaried employees with significant investments and HRA claims, the old regime may still save more. The break-even point depends on your specific deduction portfolio — typically around ₹3-4 lakh in total deductions.
How: The calculator applies both old and new regime tax slabs to your gross income. For the old regime, it deducts all your claimed exemptions (80C, 80D, HRA, NPS, home loan). For the new regime, it applies only the standard deduction. It then compares the net tax payable under each and recommends the more beneficial regime.
Run the calculator when you are ready.
🇮🇳 Sample Tax Scenarios
Click a scenario to calculate your tax comparison.
💻 IT Professional (₹15L CTC)
Tech professional with standard deductions. Metro city, HRA benefits.
👨💼 Mid-Level Employee (₹8L)
Average salaried employee with moderate deductions.
👴 Senior Citizen (₹10L Pension)
Retired person with pension and medical deductions.
💰 Senior Executive (₹25L)
High earner with maximum deductions and home loan.
🎓 Fresher (₹5L)
Entry-level salary with minimal deductions.
✈️ Returning NRI (₹20L)
NRI returning to India with no existing investments.
📊 Enter Your Income Details
💰 Income
📋 Deductions (Old Regime Only)
👤 Personal Details
📚 Understanding India's Tax Regimes
Union Budget 2026 Updates
The 2026 Budget enhanced the New Tax Regime with increased rebates and revised slab rates, making it more attractive for middle-income taxpayers. The government continues to push adoption of the new regime.
Old vs New Regime: Key Differences
| Feature | Old Regime | New Regime |
|---|---|---|
| Tax Slabs | 3 slabs (5%, 20%, 30%) | 6 slabs (0-30%) |
| 80C Deduction | ✓ Up to ₹1.5L | ✗ Not Available |
| HRA Exemption | ✓ Available | ✗ Not Available |
| Home Loan Interest | ✓ Up to ₹2L | ✗ Not Available |
| Standard Deduction | ✓ ₹50,000 | ✓ ₹75,000 |
| NPS 80CCD(2) | ✓ Available | ✓ Available |
Which Regime is Right for You?
Choose Old Regime If:
- ✓ You have home loan interest deduction
- ✓ You claim significant HRA exemption
- ✓ You invest ₹1.5L+ in 80C instruments
- ✓ You have medical insurance premiums (80D)
- ✓ Your deductions exceed ₹3-4 lakhs
Choose New Regime If:
- ✓ You have minimal deductions
- ✓ You don't have a home loan
- ✓ You live in own house (no HRA)
- ✓ You prefer simplicity
- ✓ Your income is under ₹12L (tax-free)
Tax Slab Comparison FY 2025-26
Old Regime
- • Up to ₹2.5L: Nil
- • ₹2.5L - ₹5L: 5%
- • ₹5L - ₹10L: 20%
- • Above ₹10L: 30%
New Regime (2026)
- • Up to ₹4L: Nil
- • ₹4L - ₹8L: 5%
- • ₹8L - ₹12L: 10%
- • ₹12L - ₹16L: 15%
- • ₹16L - ₹20L: 20%
- • ₹20L - ₹24L: 25%
- • Above ₹24L: 30%
❓ Frequently Asked Questions
Can I switch between regimes?
Salaried employees can switch each year. Business/professional income taxpayers can switch only once in their lifetime from new to old regime. Choose carefully.
What is the tax rebate under Section 87A?
Under the new regime, if your taxable income is up to ₹12 lakh, you get full tax rebate - effectively zero tax. This makes the new regime very attractive for middle income earners.
Is NPS still beneficial under new regime?
Yes! Employer NPS contribution (80CCD(2)) is available in both regimes - up to 14% of basic salary for government employees, 10% for others. This is a key tax-saving opportunity in the new regime.
What about capital gains tax?
Capital gains tax is the same under both regimes. STCG on equity is 20%, LTCG on equity above ₹1.25L is 12.5% (2024 Budget changes). This doesn't affect regime choice.
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Major Deductions (Old Regime Only)
Section 80C (₹1.5L)
PPF, ELSS, Life Insurance, NSC, 5-year FD, Tuition fees, Home loan principal
Section 80D (₹25K-1L)
Health insurance premiums for self, family, and parents
Section 24(b) (₹2L)
Home loan interest for self-occupied property
HRA Exemption
Lowest of: Actual HRA, 50%/40% of salary, or Rent - 10% of salary
Break-Even Deductions Analysis
At what deduction level does Old Regime become beneficial?
| Gross Income | Break-Even Deductions | Recommendation |
|---|---|---|
| ₹8-12 Lakh | ₹2-3 Lakh | Usually New |
| ₹12-16 Lakh | ₹3-4 Lakh | Compare Both |
| ₹16-24 Lakh | ₹4-5 Lakh | Compare Both |
| Above ₹24 Lakh | ₹5+ Lakh | Often Old (with HRA+80C+Home) |
What if I don't choose any regime?
New Regime is the default from FY 2023-24. If you don't opt out and choose Old Regime explicitly, you'll be taxed under the New Regime automatically.
How do I inform my employer about regime choice?
Submit your choice via Form 12BAA to your employer at the start of the financial year. You can also declare investment proofs for old regime deductions.
What about surcharge and cess?
Both regimes have 4% Health & Education Cess. Surcharge applies to income above ₹50L (10%), ₹1Cr (15%), ₹2Cr (25%), ₹5Cr (37%). New regime caps surcharge at 25% for ₹2Cr+.
📚 Official Data Sources
Important Disclaimer
This calculator provides estimates based on Indian Income Tax rules for FY 2025-26 (AY 2026-27). New Regime is default; opt-out required for Old Regime. Section 87A rebate: ₹12L threshold, ₹60,000 max. Tax laws are subject to change. Consult a Chartered Accountant for personalized tax planning advice.
Last verified: February 4, 2026 | Data source: incometaxindia.gov.in
For educational and informational purposes only. Verify with a qualified professional.
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CalculateAnswer Capsule: New regime is default (FY 2023-24). Old regime allows 80C, 80D, HRA, NPS deductions. Use the Tax Regime Comparison to see old vs new regime savings—which saves you more depends on your deductions.
What are the key takeaways for India tax regimes?
- • New regime is default from FY 2023-24 — opt-out required for Old Regime
- • Old regime allows deductions (80C, 80D, HRA, NPS) but has higher tax rates
- • Section 80C allows up to ₹1.5L deduction for investments (PPF, ELSS, LIC, etc.)
- • HRA benefit analysis is crucial — metro cities get 50% of salary, non-metro 40%
- • Standard deduction of ₹75K available in New Regime (vs ₹50K in Old)
What did you know about India tax regimes?
What are the expert tips for tax regime choice?
📊 Comparison Table
| Tool | Best For | Regime Comparison | Deduction Analysis |
|---|---|---|---|
| ClearTax Calculator | Basic tax calculation | Limited — Single regime | Basic — Standard deductions |
| Manual Calculation | Understanding tax slabs | No — Manual only | No — Manual math |
| This Calculator | Complete comparison, optimization | Yes — Side-by-side analysis | Yes — Full deduction breakdown |
📈 Infographic Stats
What is the Old vs New Tax Regime?
India offers two income tax regimes: the Old Regime with higher tax rates but multiple deductions (80C, 80D, HRA, etc.), and the New Regime with lower tax rates but almost no deductions. The New Regime is the default from FY 2023-24. Choose wisely to minimize your tax burden.
Old Regime
Higher rates but allows 80C, 80D, HRA, NPS deductions.
Exemption: ₹2.5L (General)
Max Deductions: ₹4-5L+
New Regime
Lower rates, only ₹75K standard deduction allowed.
Exemption: ₹3L
Rebate: Up to ₹7L income
FY 2025-26 Tax Slabs
Old Regime (General)
New Regime
When to Choose Each Regime
Choose Old Regime If:
- • Deductions exceed ₹3-4L
- • Have home loan interest
- • Pay significant HRA
- • Maximize 80C, NPS
Choose New Regime If:
- • Low deductions (<₹2L)
- • No home loan
- • No HRA or live rent-free
- • Want simplicity
Key Differences:
- • New is default - opt out for Old
- • New has higher rebate (₹7L)
- • Old allows more deductions
- • Switch annually allowed
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