Old vs New Tax Regime Calculator (India): FY 2025-26 & AY 2026-27
Choosing between the Old Tax Regime and the New Tax Regime (Section 115BAC) is one of the most critical personal finance decisions for salaried employees and self-employed professionals in India. With the latest amendments introduced in the Union Budget, the New Tax Regime is now the default tax regime in India, offering lower progressive tax slab rates, an enhanced Standard Deduction of ₹75,000 (for salaried taxpayers and pensioners), and full tax exemption on taxable income up to ₹7.75 Lakhs via Section 87A rebate.
However, if you have significant tax deductions under Chapter VI-A—such as Section 80C (EPF, PPF, ELSS, life insurance up to ₹1.5 Lakh), Section 80D (health insurance up to ₹75,000), Section 24(b) (Home Loan interest up to ₹2,00,000), House Rent Allowance (HRA), or Section 80CCD(1B) NPS (₹50,000)—the traditional Old Tax Regime may yield substantial additional tax savings.
Revised Income Tax Slabs Comparison (FY 2025-26 / AY 2026-27)
The table below summarizes the statutory tax bracket slabs under both regimes for individual taxpayers under 60 years of age:
| Income Slab (New Tax Regime – Sec 115BAC) | New Regime Rate | Income Slab (Old Tax Regime) | Old Regime Rate |
|---|---|---|---|
| Up to ₹3,00,000 | Nil (0%) | Up to ₹2,50,000 | Nil (0%) |
| ₹3,00,001 – ₹7,00,000 | 5% (Zero Tax with 87A Rebate) | ₹2,50,001 – ₹5,00,000 | 5% (Zero Tax with 87A Rebate) |
| ₹7,00,001 – ₹10,00,000 | 10% | ₹5,00,001 – ₹10,00,000 | 20% |
| ₹10,00,001 – ₹12,00,000 | 15% | Above ₹10,00,000 | 30% |
| ₹12,00,001 – ₹15,00,000 | 20% | — | — |
| Above ₹15,00,000 | 30% | — | — |
Break-Even Deduction Thresholds: Which Regime Should You Pick?
To determine whether the Old Regime or the New Regime will save you more tax, you need to calculate your Total Eligible Deductions (including Section 80C, 80D, 24b Home Loan Interest, HRA, and NPS).
| Annual Gross Salary | New Regime Tax Due | Deductions Needed for Old Regime to Win | Recommended Decision |
|---|---|---|---|
| ₹7,50,000 | ₹0 | — | Choose New Regime (100% Tax Free) |
| ₹10,00,000 | ₹54,600 | > ₹2,62,500 in deductions | New Regime if deductions < ₹2.62L |
| ₹15,00,000 | ₹1,40,400 | > ₹3,83,333 in deductions | New Regime for most employees |
| ₹20,00,000 | ₹2,96,400 | > ₹4,25,000 in deductions | Old Regime if paying high Home Loan EMI + HRA |
| ₹25,00,000+ | ₹4,52,400 | > ₹4,75,000 in deductions | Old Regime only with maxed 80C + 80D + 24(b) + NPS |
Common Tax Deductions Permissible Only Under Old Tax Regime
- Section 80C (₹1,50,000 Limit): Employee Provident Fund (EPF), Public Provident Fund (PPF), Equity Linked Savings Schemes (ELSS), Life Insurance Premiums, National Savings Certificate (NSC), and Principal repayment on Home Loans.
- Section 80D (Health Insurance): Up to ₹25,000 for self/family and an additional ₹50,000 for senior citizen parents (Total ₹75,000).
- Section 24(b) (Home Loan Interest): Up to ₹2,00,000 for self-occupied residential property.
- Section 80CCD(1B) (NPS): Additional ₹50,000 deduction for contributions to the National Pension System (over and above 80C).
- House Rent Allowance (HRA) Exemption (Section 10(13A)): Exemption on actual rent paid if living in rented accommodation.
- Section 80E (Education Loan Interest): 100% deduction on interest paid for higher education loans with zero upper limit for 8 continuous years.
Frequently Asked Questions (FAQs) on Indian Tax Regimes
Can salaried employees switch between Old and New Tax Regimes every year?
Yes. Salaried individuals without business or professional income can switch between the Old and New Tax Regimes every financial year at the time of filing their Income Tax Return (ITR-1 or ITR-2) under Section 139(1).
What is the zero-tax limit under Section 87A for FY 2025-26?
Under the New Tax Regime, any resident individual with taxable income up to ₹7,00,000 gets a 100% tax rebate under Section 87A. Combined with the ₹75,000 standard deduction, salaried employees with a gross income up to ₹7,75,000 pay zero income tax. Under the Old Regime, the Section 87A rebate applies only up to ₹5,00,000 taxable income.
Is the Standard Deduction available under both tax regimes?
Yes. For salaried taxpayers and pensioners, the Standard Deduction is ₹75,000 under the New Tax Regime and ₹50,000 under the Old Tax Regime.
