Which regime saves more?
The new tax regime (default since FY 2023-24) offers lower slab rates but no deductions or exemptions beyond the ₹75,000 standard deduction. The old regime has higher rates but lets you claim deductions under Section 80C (PPF, ELSS, EPF), 80D (health insurance), HRA exemption, and home loan interest under Section 24(b). If your total deductions exceed ₹3-4 lakh, the old regime almost always wins. For everyone else, the new regime is simpler and cheaper.
Tax slab comparison
| Income Slab | New Regime Rate | Old Regime Rate |
|---|---|---|
| ₹0 – ₹2,50,000 | 0% | 0% |
| ₹2,50,001 – ₹4,00,000 | 0% | 5% |
| ₹4,00,001 – ₹5,00,000 | 0%* | 5% |
| ₹5,00,001 – ₹8,00,000 | 5% | 20% |
| ₹8,00,001 – ₹10,00,000 | 10% | 20% |
| ₹10,00,001 – ₹12,00,000 | 10% | 30% |
| ₹12,00,001 – ₹16,00,000 | 15% | 30% |
| ₹16,00,001 – ₹20,00,000 | 20% | 30% |
| ₹20,00,001 – ₹24,00,000 | 25% | 30% |
| Above ₹24,00,000 | 30% | 30% |
* Section 87A rebate: tax is nil for income up to ₹7,00,000 under the new regime and ₹5,00,000 under the old regime. Standard deduction: ₹75,000 (new) / ₹50,000 (old).