Old vs New Tax Regime Calculator
Compare old vs new income tax regime for FY 2026-27. See which regime saves you more tax based on your deductions.
About the Old vs New Tax Regime Calculator
Budget 2025 fundamentally changed the calculus between old and new tax regimes - and for most salaried employees, the new regime is now the clear default. The new regime offers a 75,000 standard deduction (up from 50,000), a 60,000 rebate under Section 87A that makes income up to 12 lakh completely tax-free, and a flatter 7-slab structure that peaks at 30% only above 24 lakh. For anyone earning under 12 lakh after standard deduction, the tax liability is literally zero under the new regime. The old regime, by contrast, still allows 80C (up to 1.5L), HRA exemption, 80D health insurance, home loan interest (Section 24b, up to 2L), and employer NPS contribution - deductions that can add up to 5-6 lakh for a well-structured salary. The right choice depends entirely on your specific deduction profile. This calculator computes both regimes precisely, shows the break-even deductions threshold, and tells you which regime saves more money for your exact numbers.
Tax Calculation (Both Regimes)
New Regime: Tax on (Gross - 75,000 std deduction), 87A rebate if taxable income ≤ 12L | Old Regime: Tax on (Gross - 50,000 std - deductions), 87A if income ≤ 5L
New regime slabs: 0%/5%/10%/15%/20%/25%/30% in 4L brackets | Old regime slabs: 0% up to 2.5L, 5% to 5L, 20% to 10L, 30% above 10L | Cess: 4% on tax in both regimes
Worked Example
Gross income 15 lakh, 80C 1.5L, HRA 1.2L, 80D 25k, no home loan
New Regime: Taxable 14.25L, Tax ~1,95,000 | Old Regime: Taxable 11.55L (after deductions), Tax ~1,78,000 | Old regime saves ~17,000
Tips & Insights
- 1
If your total deductions (80C + HRA + 80D + home loan interest) exceed 3-3.5 lakh, the old regime usually wins. Below that, new regime typically wins.
- 2
The new regime's 87A rebate (zero tax up to 12L taxable income) is powerful. Anyone with taxable income below 12L should almost always choose new regime.
- 3
Employer NPS contribution under 80CCD(2) is allowed in BOTH regimes with no cap percentage-wise. If your employer offers this, maximize it in either regime.
- 4
Switching declaration: inform your employer at the start of the financial year. You can finalize the choice when filing your ITR (July deadline).
- 5
Home loan interest deduction (Sec 24b, max 2L) is only available in old regime. If you have a home loan, factor this in - it can tip the balance decisively.
- 6
The new regime has a lower peak surcharge (25% vs 37% old regime). For very high incomes (5Cr+), the new regime wins primarily due to surcharge.
Why this matters for you
Choosing the wrong tax regime costs real money. For a 15 lakh income with typical deductions (80C 1.5L + HRA 1.2L + 80D 25K), the difference between regimes can be 15,000-40,000 per year. Over a 30-year career at an average saving of 25,000/year, that is 7.5 lakh in total - and if that saving is invested in equity mutual funds, it could compound to 25-30 lakh at retirement. The stakes are high enough to spend 5 minutes doing this calculation properly.
The biggest mistake salaried employees make is using their employer's default regime without checking. Many employers default to the new regime because it requires less paperwork. This is fine if you have minimal deductions - but if you have a home loan, significant 80C investments, and HRA, the old regime can easily save 30,000-50,000/year for someone earning 20-25 lakh. The break-even deductions figure in this calculator tells you exactly where the crossover point is.
The regime choice is also tied to your life stage. Early in your career (low income, low deductions, no home loan): new regime almost always wins. Mid-career with a home loan and maxed 80C: old regime often wins. Post-60 with no more home loan and 80C locked in long-term instruments: new regime may win again. Revisit this calculation every year at the start of the financial year - the optimal choice can change as your income, deductions, and life circumstances evolve.
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