New vs Old Tax Regime
Tax Year 2026–27 • Income-tax Act, 2025. Compare your tax liability and see exactly which regime saves you more money.
Deduction Breakeven Analysis
At a gross salary of ₹15 Lakh, you need at least ₹4,12,500 in total Old Regime deductions (including 80C, 80D, and HRA) before the Old Regime becomes more beneficial than the New Regime.
Comprehensive Line-by-Line Tax Comparison
| Component | New Regime (Sec 202) | Old Regime | Difference |
|---|
New vs Old Tax Regime in Tax Year 2026–27
With the enactment of the Income-tax Act, 2025 (effective 1 April 2026), the New Tax Regime is the default regime for all Indian taxpayers under Section 202. The government has made the New Regime compelling for middle-class salaried employees with expanded slabs, a ₹75,000 standard deduction under Section 19, and full tax rebate on taxable income up to ₹12 Lakh under Section 156.
Slab Comparison for 2026–27
| Income Band | New Regime Rate | Old Regime Rate |
|---|---|---|
| Up to ₹2,50,000 | 0% | 0% |
| ₹2,50,001 – ₹4,00,000 | 0% | 5% |
| ₹4,00,001 – ₹5,00,000 | 5% | 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% |
When Should You Choose the Old Regime?
You should only opt for the Old Regime if you can claim substantial deductions that bring your Old Regime tax below the New Regime tax. Typically, this requires:
- High HRA Exemption: Paying ₹30,000 to ₹50,000+ monthly rent in metros like Mumbai, Bengaluru, or Delhi NCR.
- Full ₹1.5 Lakh under 80C: EPF, PPF, ELSS mutual funds, or home loan principal repayment.
- Home Loan Interest: Up to ₹2 Lakh deduction under Section 24(b).
- Health Insurance under 80D: Up to ₹25,000 for self/family plus up to ₹50,000 for senior citizen parents.
- NPS 80CCD(1B): Additional voluntary contribution of ₹50,000.