Old vs New Tax Regime

What are the slabs under each regime?

These slabs are as published on the income tax portal for Assessment Year 2026-27, checked on 7 September 2026. Our own rate set stamps the same slab structure as of 17 August 2026 and labels it FY 2026-27. The structures agree; the year label does not. Confirm the assessment year that applies to you on incometax.gov.in before you file.

Health and education cess of 4% is added to the tax under both regimes. The Section 87A rebate is ₹60,000 in the new regime, for taxable income up to ₹12,00,000. In the old regime it is ₹12,500, for taxable income up to ₹5,00,000. The standard deduction for salaried people is ₹75,000 in the new regime and ₹50,000 in the old.

How much in deductions do I need for the old regime to win?

This is the only question that matters, and almost nobody answers it with a number. We computed it directly from the slabs above. The figures below are the total old-regime deductions you need, excluding the standard deduction, for your old-regime tax to fall to or below your new-regime tax.

Credsir calculation from the published slabs, cess and rebate. It assumes salaried income only and no surcharge. Surcharge starts above ₹50,00,000 of taxable income and changes the answer at that level.

Why the new regime is nil up to ₹12,75,000

Take the standard deduction of ₹75,000 off a ₹12,75,000 salary. Taxable income is ₹12,00,000. That is exactly the Section 87A ceiling, so the ₹60,000 rebate wipes out the tax. One rupee more of income and the rebate is gone, which is why a small raise near that line can cost you money.

Below that line the old regime cannot win. It can only match a nil bill. So every deduction you claim there buys nothing in tax. Run the numbers yourself on the old vs new regime calculator before you lock a choice.

What can I actually claim under the old regime?

Add the caps up honestly. Section 80C is capped at ₹1,50,000. Section 80CCD(1B) adds ₹50,000 for extra NPS. Section 80D allows ₹25,000 for your own family, rising to ₹1,00,000 if you also insure senior citizen parents. Section 24(b) allows ₹2,00,000 of home loan interest on a self-occupied property.

That is ₹4,25,000 at a normal 80D claim, and ₹5,00,000 at the maximum. HRA is the only large uncapped item left, and it depends on your rent, your salary structure and your city.

Here is the catch people miss. If you live in your own home in the city where you work, you cannot claim HRA on it. So the two biggest deductions rarely stack. Read our detail on home loan tax benefits and check your own numbers on the HRA exemption calculator.

Which deductions survive in the new regime?

Two matter. The standard deduction of ₹75,000 applies automatically to salaried people and pensioners. And Section 80CCD(2), the employer’s contribution to your NPS, is allowed in both regimes.

That second one is underused. Because it is available in both regimes, it does not help the old regime win, but it does cut your tax in the new one. If your employer will restructure part of your CTC into an NPS contribution, that is a deduction you can take without leaving the default regime. The NPS calculator shows what the contribution builds.

Everything else is gone. No 80C. No 80D. No HRA. No LTA. No Section 24(b) on a self-occupied property.

So which one should I pick?

Pick the new regime unless all three of these are true. Your salary is above about ₹15,00,000. You are paying meaningful home loan interest. And you have a second large claim, usually HRA on a property in a different city, or maxed 80C plus NPS plus senior-parent health cover.

If only one or two are true, the new regime almost certainly wins. If you are unsure, do not guess. Compute both with your real figures on the income tax calculator.

There is a second, non-financial argument for the new regime. It removes the incentive to buy a bad product for a tax break. A great deal of insurance in India is sold in March to people chasing an 80C receipt. In the new regime that pressure disappears, and you can buy term cover because you need cover.

Can I switch between the two regimes?

A salaried person with no business income can choose afresh each year when filing. If you have business or professional income, the choice is far more restricted and a switch back is generally allowed only once. Confirm the rule for your income type before you rely on it.

One more thing worth flagging. The Income-tax Act, 2025 renumbered sections across the statute. Familiar labels such as 80C and 87A may appear under different numbers in newer forms and notices. The rules described here are unchanged in substance, but check the current section numbering on the income tax portal rather than assuming the old numbers still apply.