Old vs New Tax Regime Calculator

What Is the Old vs New Tax Regime?

Under the old regime, salaried employees can claim deductions under Section 80C (PPF, ELSS, EPF, life insurance), Section 80D (health insurance), HRA exemption under Section 10(13A), and home loan interest under Section 24(b). The standard deduction is Rs 50,000.

Under the new regime, slab rates are significantly lower but most deductions are eliminated. The standard deduction of Rs 75,000 is the only major deduction available. Section 87A provides a full rebate for taxable income up to Rs 12 lakh under the new regime from FY 2025-26, making tax nil for that bracket.

Timeline: How India's Tax Regimes Have Evolved

The new regime has changed in almost every Budget since it was introduced, which is why an old article or a friend's advice from a couple of years ago can easily be out of date.

The old regime's slab rates and deduction limits, by contrast, have stayed largely unchanged across these same Budgets, which is part of why the comparison keeps shifting in the new regime's favour for most salaried taxpayers over time.

Old vs New Tax Regime Comparison Table

The table below shows the income tax slab rates under both regimes for FY 2026-27.

* Section 87A rebate makes tax nil for taxable income up to Rs 12,00,000 under the new regime (FY 2025-26 onwards) and Rs 5,00,000 under the old regime. Marginal relief applies just above the threshold. Standard deduction: Rs 75,000 (new) / Rs 50,000 (old).

Which Tax Regime Saves More for You?

The answer depends entirely on how much you can claim as deductions relative to your income. Below the breakeven deduction level for your income band, shown in the table below, the new regime is cheaper. Above it, the old regime wins.

Scenario 1: Rs 12 lakh annual income with Rs 2 lakh in deductions. Old regime tax works out to Rs 1,06,600. New regime tax is nil, because taxable income after the Rs 75,000 standard deduction is Rs 11,25,000, under the Rs 12 lakh Section 87A rebate threshold. The new regime saves the full Rs 1,06,600.

Scenario 2: Rs 18 lakh annual income with Rs 4.5 lakh in deductions. Old regime tax is Rs 2,10,600. New regime tax is Rs 1,50,800. The new regime still wins here, by Rs 59,800, because Rs 4.5 lakh falls well short of the roughly Rs 6.4 lakh breakeven deduction level at this income.

Scenario 3: Rs 20 lakh annual income with Rs 8 lakh in deductions (a maxed-out 80C, a large home loan interest claim, and high metro HRA). Old regime tax is Rs 1,63,800 against Rs 1,92,400 under the new regime, so the old regime now saves Rs 28,600, since Rs 8 lakh clears the roughly Rs 7.08 lakh breakeven level for this income.

Breakeven Deductions: When Does the Old Regime Win?

This table shows the deduction level at which both regimes cost exactly the same, at each income level. Claim more than the figure shown and the old regime wins; claim less and the new regime is cheaper.

Income here means gross income before the standard deduction, counting only income taxed at slab rates. The Rs 13 lakh figure looks like an outlier next to Rs 14 lakh because Rs 12-13 lakh sits right at the edge of the new regime's Section 87A rebate cliff, where marginal relief changes the comparison sharply.

Above roughly Rs 24 lakh, the breakeven flattens at Rs 8 lakh and stays there no matter how much higher income goes, since both regimes are then taxing every additional rupee at their top 30 per cent slab and only the fixed gap between the two standard deductions and rebate structures remains. See the full worked breakdown, with two independently verified examples, in the old vs new tax regime guide.

New vs Old Regime Tax by Income Level

For a quick reference without entering your own numbers, this table assumes a modest Rs 2,00,000 in old-regime deductions, a level well short of the breakeven point at every income shown, so the new regime wins throughout.

Note that the gap between the two regimes stops growing above Rs 25 lakh here (staying fixed at Rs 1,87,200) for the same reason the breakeven table flattens above Rs 24 lakh income: both regimes are taxing every additional rupee at the same 30 per cent top slab. If your deductions are closer to Rs 6-8 lakh rather than Rs 2 lakh, re-check your own numbers in the calculator above rather than relying on this table, since a higher deduction total can flip the winner entirely.

When to Choose the Old Regime vs the New Regime

The new regime wins by default for most salaried employees because it needs no paperwork and no proof of investment. The old regime only pulls ahead once you can genuinely claim several of the following at the same time.

• High rent in a metro city: HRA exemption under Section 10(13A) can run into several lakhs a year for tenants in Delhi, Mumbai, Kolkata, or Chennai. Use the HRA Calculator to work out your exact exemption.
• Section 80C fully utilised: EPF, PPF, ELSS, and life insurance premiums adding up to the full Rs 1.5 lakh limit. Check the exact tax saved on the Section 80C Calculator.
• Home loan interest on a self-occupied property: up to Rs 2 lakh a year under Section 24(b), only available in the old regime.
• Health insurance premiums: Section 80D allows Rs 25,000 for self and family, rising to Rs 1 lakh if you are also covering senior citizen parents. See the Section 80D Calculator.
• Voluntary NPS contribution: an additional Rs 50,000 deduction under Section 80CCD(1B), on top of the 80C limit. The NPS Tax Benefit Calculator breaks this down by employment type.

If you want the full CTC-to-take-home picture, including employer PF and NPS contributions, before deciding, the CTC Calculator and In-Hand Salary Calculator break down every component separately.

Case Study: Maximizing Deductions Under the Old Regime

Here is what happens when every deduction from the list above is genuinely claimed together, at Rs 15,00,000 annual income.

With the Rs 50,000 standard deduction added, taxable income drops to Rs 8,25,000 under the old regime, giving a total tax of ₹80,600 including cess. Under the new regime, the same Rs 15,00,000 income (after only the Rs 75,000 standard deduction) produces a taxable income of Rs 14,25,000 and a total tax of ₹97,500.

Fully maximizing every major deduction at once makes the old regime win here, by ₹16,900. This is close to the ceiling of what old-regime deductions can realistically achieve at this income; most taxpayers claim only some of these at once, which is why the breakeven table above shows a much smaller Rs 5,43,750 threshold needed to win at Rs 15 lakh, not the full Rs 6,25,000 used in this case study.

Old Regime Tax Calculation Formula

Apply the old regime slab rates to the taxable income. If taxable income is Rs 3,00,000 to Rs 5,00,000, the tax is 5 per cent of the amount above Rs 2,50,000. From Rs 5,00,001 to Rs 10,00,000, it is 20 per cent of the amount above Rs 5,00,000 plus Rs 12,500. Above Rs 10,00,000, it is 30 per cent of the amount above Rs 10,00,000 plus Rs 1,12,500. Add 4 per cent cess on the total tax.

New Regime Tax Calculation Formula

Apply the new regime slab rates: nil up to Rs 4,00,000, 5 per cent from Rs 4,00,001 to Rs 8,00,000, 10 per cent from Rs 8,00,001 to Rs 12,00,000, 15 per cent from Rs 12,00,001 to Rs 16,00,000, 20 per cent from Rs 16,00,001 to Rs 20,00,000, 25 per cent from Rs 20,00,001 to Rs 24,00,000, and 30 per cent above Rs 24,00,000. Add 4 per cent cess. If taxable income is Rs 12,00,000 or less, tax is nil under the new regime due to Section 87A rebate (FY 2025-26 onwards).

Section 87A Rebate Explained

Section 87A of the Income Tax Act provides a rebate that reduces the tax payable to zero for taxpayers below certain income thresholds. Under the new regime from FY 2025-26, tax is nil if taxable income is up to Rs 12,00,000 (the full rebate is up to Rs 60,000, and marginal relief applies just above this threshold). Under the old regime, the rebate threshold remains Rs 5,00,000.

For a salaried employee, the Rs 75,000 standard deduction under the new regime means someone with gross salary up to Rs 12,75,000 pays zero income tax. If your taxable income is slightly above Rs 12 lakh, marginal relief limits your tax to the excess over Rs 12 lakh rather than the full slab tax, preventing a cliff effect.

Use this Income Tax Calculator for a more detailed breakdown including cess and marginal relief calculations.

Surcharge on High Income: Old vs New Regime

Above Rs 50 lakh, an additional surcharge applies on top of the 30 per cent slab rate, and this is where the old and new regimes diverge the most at the top end.

Capping the new regime's surcharge at 25 per cent above Rs 5 crore, instead of the old regime's 37 per cent, brings the maximum possible effective tax rate (slab rate plus surcharge plus 4 per cent cess) down to about 39 per cent under the new regime, against about 42.74 per cent under the old regime. Marginal relief applies at each surcharge threshold too, so income just above a slab does not jump straight to the higher surcharge on the entire amount. This calculator does not add surcharge to its result; treat the numbers above as a manual adjustment for income beyond Rs 50 lakh.

How to Switch Between Tax Regimes

Switching between regimes depends on your income type. Salaried employees without business or professional income can switch freely between the old and new regime every financial year. You simply choose the regime at the time of filing your income tax return (ITR) that gives you the lower tax liability.

If you have business or professional income, you can opt for the new regime and switch back to the old regime only once in your lifetime. To switch back, you must file Form 10-IEA before the due date of filing your ITR for that assessment year. Once you switch back, you cannot opt for the new regime again.

The new regime has been the default regime since FY 2023-24. If you want the old regime, you must explicitly opt for it by selecting it in your ITR form or informing your employer for TDS calculation purposes.

Tax Regime for Freelancers and Business Owners

The regime choice works differently once income includes business or professional earnings, not just salary.

Key Deductions Under the Old Tax Regime

The old regime allows these major deductions that can significantly reduce your taxable income:

Capital Gains and Special-Rate Income: Does the Regime Choice Apply?

No. The old-versus-new choice only changes how income taxed at slab rates is computed. It does not touch income that the Income Tax Act taxes at its own fixed rate regardless of regime.

Capital gains on the sale of equity shares, mutual funds, and other capital assets are taxed under Sections 111A (short-term) and 112/112A (long-term), at rates set specifically for capital gains, not the slab rates shown in the comparison table above. Lottery winnings, game show prize money, and similar income under Section 115BB are taxed at a flat rate the same way.

In practice, this means a taxpayer with both salary income and capital gains needs two separate calculations: the regime choice on this page for the salary portion, and the applicable capital gains rate, unaffected by that choice, on the gains portion. Check the current capital gains rates on the Income Tax Calculator before combining the two.

Tax Regime for Senior Citizens

Age-based benefits exist only in the old regime. The new regime uses the same slab structure for every taxpayer regardless of age, which changes the comparison for anyone above 60.

The higher old-regime exemption only matters below the Section 87A rebate threshold, since new-regime tax is already nil up to Rs 12 lakh taxable income regardless of age. Where it does matter is Section 80D: senior citizens can claim up to Rs 50,000 in health insurance premiums under the old regime, against Rs 25,000 for taxpayers below 60.

A resident senior citizen (60 or above) with no income from business or profession is exempt from paying advance tax under Section 207(2) and can pay the full amount at the time of filing the return instead.

Tax Regime for NRI Taxpayers

NRI taxpayers in India are subject to the same income tax slab rates as resident individuals for income earned or received in India. The choice between old and new regimes applies to NRIs as well. However, specific provisions under Sections 115A through 115F may provide concessional tax rates for certain types of investment income earned by NRIs.

NRI income from NRE account interest is tax-free in India. NRO account interest is taxable. Capital gains from the sale of Indian assets are taxed at applicable rates. NRIs should carefully evaluate which regime works better given their specific income composition and available deductions.

The multi-currency selector in this calculator converts all amounts to USD, EUR, GBP, or other currencies, making it easier for NRI users to understand their Indian tax liability in their resident currency. Use the In-Hand Salary Calculator to compute your actual take-home pay after tax deductions.

Common Mistakes When Choosing a Tax Regime

Limitations of This Calculator

Key Takeaways

• Up to roughly Rs 12.75 lakh gross salary, the new regime is unbeatable: the Section 87A rebate brings tax to nil, and no deduction total under the old regime can go lower than zero.
• Between Rs 13 lakh and Rs 20 lakh, the choice depends on your actual deductions. Check your income against the breakeven table above rather than assuming either regime wins by default.
• Above Rs 24 lakh, the breakeven deduction level flattens at a fixed Rs 8 lakh, so the decision stops depending on exactly how high your income is and depends only on whether you can clear that fixed deduction bar.
• Salaried employees without business income can re-run this comparison every year at ITR filing time. There is no lock-in, so it is worth checking again whenever your rent, home loan, or investment mix changes.

How to Use This Tax Regime Calculator

1. Enter your annual income: use a quick preset or enter your gross total income from salary for the financial year.
2. Add 80C, 80D, and HRA: enter your Section 80C investments (PPF, ELSS, EPF), Section 80D health insurance premiums, and HRA exemption if you pay rent.
3. More details: click More settings to enter home loan interest and other deductions.
4. Compare: the result panel shows your tax under both regimes side by side, the winner highlighted, and a donut chart of take-home pay versus tax under the better regime.

Click any input value to type a precise number. Use the currency selector to view amounts in USD, EUR, GBP, or other currencies. All calculations include the applicable Section 87A rebate and 4 per cent health and education cess.

Tax Regime Glossary: Key Terms Explained

Frequently Asked Questions

Disclaimer: All calculations on this page are indicative only. Tax liability depends on individual circumstances, applicable exemptions, and specific provisions of the Income Tax Act. This calculator is for educational and planning purposes only and does not constitute financial advice. Consult a SEBI-registered investment adviser or a qualified chartered accountant before making tax decisions.

Income Tax Breakdown by Salary Level

Each guide below has a complete slab-by-slab computation, old vs new regime comparison, and monthly in-hand salary for that specific salary level.