New vs Old Tax Regime: Which is Better for You?
Compare New vs Old Tax Regime for FY 2025-26. See which regime saves more tax based on your income, deductions, and investments.
| Feature | New Tax Regime | Old Tax Regime |
|---|---|---|
| Tax Slabs FY 2025-26 | ₹4L nil, ₹4-8L 5%, ₹8-12L 10%, ₹12-16L 15%, ₹16-20L 20%, ₹20-24L 25%, >₹24L 30% | ₹2.5L nil, ₹2.5-5L 5%, ₹5-10L 20%, >₹10L 30% |
| Standard Deduction | ₹75,000✓ BEST | ₹50,000 |
| Section 80C (₹1.5L) | Not available | Available✓ BEST |
| Section 80D (Health Insurance) | Not available | Available✓ BEST |
| HRA Exemption | Not available | Available✓ BEST |
| Section 87A Rebate | Up to ₹25,000 (income up to ₹12L)✓ BEST | Up to ₹12,500 (income up to ₹5L) |
| Best For | Salaried with limited investments | Those with significant deductions/investments |
| Tax at ₹12L Income | ₹0 (after rebate)✓ BEST | ~₹60,000-80,000 (with deductions) |
| Tax at ₹20L Income | ~₹1,92,400✓ BEST | ~₹2,20,000-2,60,000 |
Summary
The New Regime is better for most salaried individuals with income up to ₹12L (zero tax due to rebate). For higher incomes with significant deductions (80C, 80D, HRA, LTA), the Old Regime may still be better. Use our calculator to compare both regimes with your actual numbers.
Frequently Asked Questions
Find answers to common questions about this calculator below.
For ₹12 lakh salary, the New Regime is clearly better as tax is zero after rebate. Under Old Regime, even with maximum deductions, you would pay ₹50,000-70,000 in tax. Choose New Regime if your income is ₹12L or below.
Salaried individuals can switch between New and Old Regime every year (except if you have business income, where the choice is once in a lifetime). You can choose whichever regime gives lower tax each financial year.
For ₹15 lakh, it depends on your deductions. New Regime tax: ~₹1,28,700. Old Regime with max 80C, 80D, HRA: ~₹1,50,000-1,80,000. New Regime is likely better unless you have very high HRA or additional deductions like NPS (80CCD).