Old vs New Tax Regime Calculator 2025-26
| Old Regime | New Regime | |
|---|---|---|
| Gross Income | ₹10,00,000 | ₹10,00,000 |
| Standard Deduction | ₹50,000 | ₹75,000 |
| Other Deductions | ₹1,50,000 | ₹0 (not allowed) |
| Total Deductions | ₹2,00,000 | ₹75,000 |
| Taxable Income | ₹8,00,000 | ₹9,25,000 |
| Income Tax | ₹72,500 | ₹42,500 |
| Health & Education Cess (4%) | ₹2,900 | ₹1,700 |
| Total Tax Payable | ₹75,400 | ₹44,200 |
| In-Hand Income | ₹9,24,600 | ₹9,55,800 |
| New Regime saves ₹31,200 — recommended for your income profile | ||
Tax calculations are based on FY 2025-26 (AY 2026-27) slabs. Surcharge is not included (applies for income above ₹50 lakh). Consult a CA or tax advisor for complex income situations.
Old vs New Tax Regime — Overview
India has two personal income tax systems since FY 2020-21: the Old Tax Regime (with deductions and exemptions) and the New Tax Regime (lower rates, minimal deductions). From FY 2023-24, the new regime became the default. The right choice depends entirely on how much you can claim in deductions.
Income Tax Slabs FY 2025-26
The tax slabs differ significantly between the two regimes:
| Income Slab | Old Regime (Below 60) | New Regime (All Ages) |
|---|---|---|
| Up to ₹2.5 lakh | Nil | Up to ₹3L: Nil |
| ₹2.5L – ₹3L | 5% | |
| ₹3L – ₹5L | 5% | ₹3L – ₹7L: 5% |
| ₹5L – ₹7L | 20% | ₹7L – ₹10L: 10% |
| ₹7L – ₹10L | 20% | ₹10L – ₹12L: 15% |
| ₹10L – ₹12L | 30% | ₹12L – ₹15L: 20% |
| Above ₹10L | 30% | Above ₹15L: 30% |
Note: For senior citizens (60–80 years) under old regime, the nil slab extends to ₹3 lakh. For super senior citizens (above 80), nil slab extends to ₹5 lakh. New regime slabs are the same for all ages.
Both regimes add a 4% Health and Education Cess on the income tax calculated.
Old Regime — All Allowed Deductions
The old regime allows a wide range of deductions that can substantially reduce your taxable income. Here are the most significant ones:
| Section | Deduction | Maximum Limit |
|---|---|---|
| Standard Deduction | Flat deduction for salaried/pensioners | ₹50,000 |
| Section 80C | EPF, PPF, ELSS, LIC premium, home loan principal, tuition fees | ₹1,50,000 |
| Section 80CCD(1B) | NPS additional contribution | ₹50,000 |
| Section 80D | Medical insurance premium (self + parents) | ₹25,000–75,000 |
| Section 24(b) | Home loan interest (self-occupied) | ₹2,00,000 |
| HRA Exemption | Rent relief for salaried employees | Varies (see HRA calculator) |
| LTA | Leave Travel Allowance for domestic travel | Actual travel cost, 2 journeys in 4 years |
| Section 80E | Education loan interest | Actual interest, 8 years |
| Section 80G | Donations to approved charities | 50% or 100% of donated amount |
Breakeven Point — When to Choose Which Regime
The new regime's advantage is the higher zero-tax threshold (up to ₹7 lakh taxable income vs ₹5 lakh in old regime) and lower slab rates in the ₹7L–₹15L range. The old regime wins when high deductions reduce taxable income enough to offset the slab rate difference.
As a rough rule:
- If your total deductions (beyond the ₹75,000 new regime standard deduction) are above ₹3.5–4.5 lakh, the old regime usually saves more tax.
- If you have HRA + 80C (maxed) + 80D + home loan interest, you are likely benefiting from the old regime at incomes between ₹8L–₹20L.
- At very high incomes (₹30L+) or very few deductions, the new regime is almost always better due to lower rates on the ₹15L+ slab.
New Regime — Zero Tax up to ₹12 Lakh (Budget 2025)
Budget 2025 (announced February 1, 2025) introduced a key change: an enhanced rebate under Section 87A that makes income up to ₹12 lakh effectively tax-free under the new regime for FY 2025-26. Combined with the ₹75,000 standard deduction, salaried employees earning up to ₹12.75 lakh gross pay zero income tax under the new regime.
Note: The rebate under the new regime applies to regular income only. Special rate incomes (capital gains, etc.) are not covered by this rebate and are taxed separately.
Frequently Asked Questions
Which tax regime is better — old or new in 2025-26?
It depends on your deductions. If your total deductions (80C, HRA, 80D, home loan interest, NPS, etc.) exceed approximately ₹3.75 lakh per year (for income around ₹10L+), the old regime typically saves more tax. If you have few deductions or claim less than the new regime's ₹75,000 standard deduction advantage, the new regime is better. Use the calculator above to find the exact crossover for your specific income and deductions.
What is the new tax regime standard deduction for FY 2025-26?
Under the new regime for FY 2025-26 (Budget 2024), the standard deduction is ₹75,000 — increased from ₹50,000. Under the old regime, the standard deduction is ₹50,000. This ₹25,000 extra standard deduction under the new regime benefits salaried employees who switch from old to new regime.
What deductions are not allowed under the new tax regime?
The new tax regime does not allow most common deductions including: Section 80C (EPF, PPF, ELSS, LIC, home loan principal), Section 80D (medical insurance), Section 80E (education loan interest), Section 80G (donations), HRA exemption, LTA exemption, home loan interest deduction under Section 24(b), professional tax, and NPS deduction under 80CCD(1). However, employer NPS contribution (80CCD(2)) and some other specific allowances remain available.
What is the Section 87A rebate for FY 2025-26?
Section 87A provides a full tax rebate for taxpayers with taxable income below a threshold. Under the old regime, the rebate applies if taxable income is up to ₹5 lakh — meaning zero tax is payable. Under the new regime, the rebate applies if taxable income is up to ₹7 lakh — meaning a person earning up to ₹7.75 lakh (after ₹75,000 standard deduction) pays zero tax under the new regime.
Is the new tax regime default from FY 2024-25?
Yes. From FY 2023-24 onwards, the new tax regime became the default regime for all taxpayers. If you do not file your ITR or submit a declaration to your employer specifying the old regime, the new regime will be applied automatically. You must explicitly opt for the old regime each year if you want to claim deductions. Salaried employees can inform their employer at the start of the year; self-employed can choose the regime when filing ITR (before the due date, without extensions).
Can I switch between old and new tax regime every year?
Salaried individuals can switch between old and new regime every financial year by informing their employer. Self-employed individuals with business income can only switch once from old to new regime (after switching, reverting back is generally not allowed). However, if a self-employed person does not have business income in a particular year, they can freely choose either regime for that year.
Related Calculators
- Income Tax Calculator India — Detailed India income tax calculation
- HRA Calculator — Calculate HRA exemption for tax saving
- Section 80C Calculator — Maximize your ₹1.5 lakh 80C limit
- Salary Calculator India — CTC to in-hand salary calculation
- NPS Calculator — National Pension System maturity value