Old vs New Tax Regime 2026 – Which Is Better?
Calculate exactly which tax regime saves you more tax in FY 2025–26. Enter your income and deductions, see tax under both regimes, and get a clear recommendation. Uses FY 2025–26 / AY 2026–27 rules for resident salaried individuals below age 60. Includes rebate, marginal relief, surcharge and cess.
Old Regime
Taxable income: ₹6,25,000
Tax payable: ₹37,500
New Regime
Taxable income: ₹11,25,000
Tax payable: ₹75,000
Your saving Pick Old
Old regime saves you ₹37,500 per year
Tax Slabs 2026 (Budget FY 2025–26)
Old Tax Regime
| Income | Rate |
|---|---|
| Up to ₹2.5 L | 0% |
| ₹2.5 L – ₹5 L | 5% |
| ₹5 L – ₹10 L | 20% |
| Above ₹10 L | 30% |
Standard deduction: ₹50,000
Rebate u/s 87A: up to income ₹5 lakh (full rebate)
New Tax Regime (default)
| Income | Rate |
|---|---|
| Up to ₹4 lakh | 0% |
| ₹4–8 lakh | 5% |
| ₹8–12 lakh | 10% |
| ₹12–16 lakh | 15% |
| ₹16–20 lakh | 20% |
| ₹20–24 lakh | 25% |
| Above ₹24 lakh | 30% |
Standard deduction: ₹75,000
Rebate u/s 87A: up to taxable income ₹12 lakh (full rebate; marginal relief above this)
Deductions: What's Allowed vs Not
| Deduction | Old Regime | New Regime |
|---|---|---|
| Standard deduction | ✔ (₹50K) | ✔ (₹75K) |
| 80C (up to ₹1.5 L) — EPF, PPF, ELSS, LIC etc. | ✔ | ✘ |
| 80D (health insurance up to ₹25K / ₹50K seniors) | ✔ | ✘ |
| 80CCD(1B) — Extra NPS ₹50K | ✔ | ✘ |
| 80CCD(2) — Employer NPS contribution | ✔ | ✔ |
| HRA exemption (salaried) | ✔ | ✘ |
| Home loan interest (24b) — self-occupied | ✔ (up to ₹2L) | ✘ |
| Home loan interest — let-out property | ✔ (full) | ✔ |
| 80E (education loan interest) | ✔ (unlimited) | ✘ |
| LTA (Leave Travel Allowance) | ✔ | ✘ |
| Rebate u/s 87A | ✔ (taxable income up to ₹5L) | ✔ (taxable income up to ₹12L) |
Compare your own income and deductions
There is no universal deduction threshold at which the old regime wins. Use actual eligible deductions above and compare both taxes at your income. This calculator covers resident salaried individuals under 60 with ordinary slab-rate income.
Who Should Pick Old Regime?
- Salaried in metros with HRA exemption of ₹2L+/year
- Home loan interest ₹2L/year under 80C + 24b
- Fully invested in 80C (₹1.5L) + 80D (₹25K) + 80CCD(1B) (₹50K)
- Earning >₹15 lakh with disciplined tax planning
- Education loan borrowers (full 80E interest deduction)
Who Should Pick New Regime?
- Young professionals with limited deductions
- Taxable income up to ₹12 lakh (new-regime rebate under 87A)
- No HRA (self-owned property without loan, or staying with family)
- Prefer simplicity over maximum tax saving
- Have high-value employer NPS (80CCD(2)) — still allowed in new regime
Frequently Asked Questions
Which is better — old or new tax regime?
The better regime depends on your income and eligible deductions. Use the calculator above to compare both results; a fixed deduction rule of thumb is unreliable.
What are the new tax regime slabs for 2026?
₹0–4L: 0%; ₹4–8L: 5%; ₹8–12L: 10%; ₹12–16L: 15%; ₹16–20L: 20%; ₹20–24L: 25%; above ₹24L: 30%. Salary standard deduction ₹75,000. Rebate up to ₹12 lakh taxable income, with marginal relief just above it.
Can I switch regimes every year?
Salaried: yes, every year when filing ITR. Business/profession income: one-time switch from new to old; cannot switch back.
Is HRA allowed in new tax regime?
No. HRA exemption, 80C, 80D, home loan interest (self-occupied), 80E, LTA — all excluded under the new regime.
Does new regime allow NPS 80CCD(1B)?
No, the additional ₹50K NPS deduction (80CCD(1B)) is not available under new regime. However, employer contribution under 80CCD(2) IS allowed in both regimes.
FY 2025–26 (AY 2026–27), resident salaried individuals under 60 with ordinary slab-rate income. Includes standard deduction, rebate, marginal relief, surcharge and cess. Special-rate income and employer NPS contributions are outside this estimate. Official tax rules.