FY 2025-26 (AY 2026-27)
New vs old tax regime
The new regime gives you wider slabs, a larger standard deduction and no tax at all up to ₹12,00,000. It takes away almost every exemption in exchange. Whether that is a good trade depends on one number: how much you actually claim.
Rates reviewed 10 November 2026 · General information, not tax advice.
The short answer
If your old-regime deductions come to less than roughly ₹3,00,000 at a ₹15 lakh salary — or if you earn under ₹12,00,000, where the new regime charges nothing at all — take the new regime. If you pay serious rent in a metro, max out 80C, carry a home loan and insure your family, run the numbers: the old regime may still win.
The rates
Slabs, side by side
New regime
Standard deduction ₹75,000 · rebate to ₹12,00,000
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Old regime
Standard deduction ₹50,000 · rebate to ₹5,00,000
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
The exempt slab widens to ₹3,00,000 at age 60 and ₹5,00,000 above 80. The new regime makes no distinction by age.
The cost
What the new regime takes away
- HRA exemption u/s 10(13A)
- Leave travel allowance
- Section 80C — PF, ELSS, life insurance, tuition fees
- Section 80D — health insurance premiums
- Section 80CCD(1B) — the extra ₹50,000 of NPS
- Home-loan interest on a self-occupied property u/s 24(b)
- Section 80E education-loan interest, 80G donations, 80TTA savings interest
- Professional tax u/s 16(iii)
What survives
What you still keep
- Standard deduction — and larger, at ₹75,000 against ₹50,000
- Employer NPS contribution u/s 80CCD(2), up to 14% of basic
- Gratuity exemption u/s 10(10) and leave encashment u/s 10(10AA)
- Employer PF contribution within the statutory limit
- Home-loan interest on a genuinely let-out property
- Agniveer Corpus Fund contributions u/s 80CCH
The decision point
How much you must claim before the old regime wins
These are approximate break-even totals, excluding the standard deduction since both regimes allow one. Claim less than this and the new regime is cheaper.
| Gross salary | Break-even deductions | In practice |
|---|---|---|
| ₹8,00,000 | No amount | The new regime's rebate makes this tax-free; the old regime cannot beat zero. |
| ₹12,00,000 | No amount | Still tax-free under the new regime. The old regime loses whatever you claim. |
| ₹15,00,000 | ≈ ₹3,00,000 | Full 80C plus meaningful HRA is usually needed to draw level. |
| ₹20,00,000 | ≈ ₹3,75,000 | Reachable with 80C, 80D, 80CCD(1B) and HRA on a metro rent. |
| ₹30,00,000 | ≈ ₹4,25,000 | Needs home-loan interest on top of the usual deductions. |
| ₹50,00,000 | ≈ ₹4,50,000 | Practically the ceiling of what most salaried people can claim. |
Approximations for a salaried taxpayer under 60 with no capital gains. Your own structure — basic percentage, rent, employer NPS — moves these figures, which is what the calculator below is for.
Your numbers
Compare both regimes
80C, 80D, HRA, home-loan interest and the rest, added together. The new regime allows almost none of them, which is the whole trade-off.
The new regime is cheaper here by ₹1,59,900.
New regime
Lower tax₹97,500
6.5% of gross · taxable ₹14,25,000
| Band | Rate | Tax |
|---|---|---|
| ₹0 – ₹4,00,000 | 0% | ₹0 |
| ₹4,00,000 – ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,000 – ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,000 – ₹16,00,000 | 15% | ₹33,750 |
Health & education cess (4%)₹3,750
Old regime
₹2,57,400
17.2% of gross · taxable ₹14,50,000
| Band | Rate | Tax |
|---|---|---|
| ₹0 – ₹2,50,000 | 0% | ₹0 |
| ₹2,50,000 – ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,000 – ₹10,00,000 | 20% | ₹1,00,000 |
| ₹10,00,000 – above | 30% | ₹1,35,000 |
Health & education cess (4%)₹9,900
FY 2025-26 (AY 2026-27). Covers slab tax, the Section 87A rebate with marginal relief, surcharge with marginal relief, and cess. It does not model capital gains, business income or foreign assets. Estimates only, not tax advice.
Mechanics
Who may switch, and how often
Salaried, no business income
Choose afresh every financial year, including at the time of filing. What you declare to your employer for TDS does not bind you — you may file under the other regime if it works out better.
Business or professional income
You may opt out of the new regime only once, using Form 10-IEA before the due date. Once you return to the new regime, the old one is closed to you for good.
The default
The new regime applies automatically unless you opt out. Doing nothing is a choice, and for most salaried taxpayers it is now the right one.
Questions people actually search
Choosing a regime, answered
Which tax regime is better for FY 2025-26?
For most salaried people, the new regime — because income up to ₹12,00,000 is effectively tax-free through the Section 87A rebate, the standard deduction is ₹75,000, and the slabs are wider. The old regime only wins once your total deductions exceed a break-even figure that rises with income: roughly ₹3,00,000 at a ₹15,00,000 salary and about ₹4,50,000 at ₹50,00,000. Most people do not claim that much.
What is the break-even deduction?
The amount of old-regime deductions at which both regimes produce the same tax. Below it the new regime is cheaper; above it the old regime is. It is not a single number — it rises with income because the slab differences widen. The table on this page gives the approximate figure at each income level, and the calculator gives the exact answer for your numbers.
Is the new regime compulsory?
No, but it is the default. Since FY 2023-24 the new regime applies automatically unless you opt out. Salaried taxpayers with no business income may choose afresh each financial year, including at the time of filing. If you have business or professional income you may opt out only once, and switching back to the new regime ends your ability to return to the old one.
Can I switch regimes every year?
If you are salaried and have no business income, yes — you may choose each year, and the choice you give your employer for TDS does not bind you at filing. You can tell your employer one thing in April and file under the other regime in July if the numbers work out differently. With business income the choice is far more restricted, via Form 10-IEA.
Does the ₹12 lakh rebate apply to capital gains?
No. The Section 87A rebate applies to income taxed at slab rates. Capital gains taxed at special rates under Sections 111A, 112 and 112A are excluded from the rebate, so a person whose income is largely short-term or long-term capital gains cannot rely on the ₹12,00,000 figure.
Is HRA really unavailable in the new regime?
Yes, entirely. Your house rent allowance remains part of your salary and is fully taxable. For someone paying high rent in Delhi, Mumbai, Kolkata or Chennai — where the 50% limb applies — this is often the single largest reason the old regime still wins, and it is worth computing both before deciding.
Your business has a filing deadline too.
Dyopact keeps GST invoices, TDS on contractor payments and the MSME 45-day clock on one record — so the numbers you file are the numbers you billed.