Old vs New Tax Regime Comparison — Choose Wisely for FY 2025-26
Compare old and new income tax regimes side by side. Calculate exact tax under both regimes with all deductions to find which saves you more money in 2026.
The Indian government offers two tax regimes and choosing the wrong one can cost you lakhs per year. The new regime has lower slab rates starting from 5% for income above Rs 3 lakh with a standard deduction of Rs 75000 but no other deductions. The old regime has higher rates but allows deductions under 80C 80D 80E HRA LTA NPS and home loan interest. The breakeven point is approximately Rs 3.75 lakh in total deductions — if your deductions exceed this the old regime saves more.
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Key Information
| Parameter | Details |
|---|---|
| New Regime Standard Deduction | Rs 75000 |
| New Regime Tax-Free Income | Up to Rs 7 lakh (with rebate) |
| Old Regime 80C Limit | Rs 1.5 lakh |
| Old Regime 80D (Self + Parents) | Rs 25000 + Rs 25000 = Rs 50000 |
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Use Calculator NowFrequently Asked Questions
At what salary level does old regime become better?
Generally if your total deductions exceed Rs 3.75 lakh the old regime saves more tax. This is achievable if you claim 80C (Rs 1.5L) + 80D (Rs 50K) + HRA (Rs 1.5L+) + NPS 80CCD(1B) (Rs 50K) + home loan interest (Rs 2L). For a salary of Rs 15 lakh or above with a home loan the old regime almost always saves more. For simpler tax situations the new regime is better.
Can I switch between old and new regime?
Salaried employees can switch between old and new regime every year. You choose at the time of filing your ITR. Business owners with professional income can only switch once from old to new and cannot switch back. It is advisable to calculate your tax under both regimes every year before choosing as your deduction profile may change.
What deductions are NOT available in new regime?
The new regime does not allow: HRA exemption, LTA exemption, Section 80C deductions (PPF, ELSS, LIC), Section 80D (health insurance), home loan interest deduction under Section 24, and most other Chapter VI-A deductions. Only the standard deduction of Rs 75000 and employer NPS contribution under 80CCD(2) are available.
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Last updated: 24 March 2026