New Tax Regime vs Old Tax Regime
From FY 2023-24 the new tax regime is the default, but you can still opt for the old regime. The right choice depends on how many deductions you claim.
| New Regime | Old Regime | |
|---|---|---|
| Slab rates | Lower | Higher |
| Standard deduction | ₹75,000 | ₹50,000 |
| 80C, 80D, HRA, home loan | Not allowed | Allowed |
| No tax up to (taxable) | ₹12 lakh | ₹5 lakh |
New Regime Slabs (FY 2025-26)
| Income Slab | Rate |
|---|---|
| Up to ₹4,00,000 | 0% |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
A Section 87A rebate makes the tax zero for taxable income up to ₹12 lakh under the new regime. A 4% Health & Education Cess applies on the tax, and surcharge applies above ₹50 lakh.
Which Regime Should You Pick?
- Few deductions? The new regime's lower rates and bigger rebate usually win.
- Large 80C/80D/HRA/home-loan deductions? The old regime can come out ahead.
- This calculator computes both and tells you the cheaper option and your savings.
Frequently Asked Questions
Is the new regime compulsory?
No. It is the default, but salaried taxpayers can choose the old regime each year when filing.
Can I claim 80C in the new regime?
No. Most deductions including 80C are not available under the new regime; only a few like the employer's NPS contribution and the standard deduction apply.