Income Tax Calculator 2026 - New vs Old Regime Comparison | Save More Tax India
Income Tax Calculator 2026
Compare New vs Old Regime - find which saves you more tax this year
New vs Old Tax Regime - Which is Better for You?
From FY 2024-25, the New Tax Regime has become the default for all salaried employees and individuals. However, you can still opt for the Old Regime if it saves you more tax. The choice depends entirely on your deductions and investments.
Key Differences at a Glance
- New Regime: Lower tax rates but almost no deductions (only Standard Deduction of ₹75,000)
- Old Regime: Higher tax rates but you can claim 80C, 80D, HRA, Home Loan interest, and more
- Tax Rebate u/s 87A: Up to ₹25,000 in New Regime (income up to ₹7L = zero tax)
- Surcharge: Reduced to 25% max in New Regime (vs 37% in Old)
Tax Slabs Comparison (FY 2026-27)
New Regime Slabs:
- ₹0 - ₹3,00,000: 0%
- ₹3,00,001 - ₹7,00,000: 5%
- ₹7,00,001 - ₹10,00,000: 10%
- ₹10,00,001 - ₹12,00,000: 15%
- ₹12,00,001 - ₹15,00,000: 20%
- Above ₹15,00,000: 30%
Old Regime Slabs (Below 60 years):
- ₹0 - ₹2,50,000: 0%
- ₹2,50,001 - ₹5,00,000: 5%
- ₹5,00,001 - ₹10,00,000: 20%
- Above ₹10,00,000: 30%
When to Choose Old Regime?
Old Regime is better when your total deductions exceed ₹3-4 lakh. Common scenarios:
- You pay high rent and get HRA exemption (₹1.5L+)
- You have a home loan with ₹2L interest deduction
- You invest ₹1.5L in 80C (PPF, ELSS, LIC)
- You pay health insurance premium for family (₹50K-₹1L)
When to Choose New Regime?
New Regime is better when you have minimal deductions:
- You don't pay rent (live in own house or company accommodation)
- No home loan
- Minimal investments in tax-saving instruments
- Your income is below ₹12-15 lakh with standard deduction
Frequently Asked Questions
Is New Regime mandatory from FY 2024-25?
New Regime is the default, but not mandatory. You can still opt for Old Regime while filing ITR if it saves you more tax. Salaried employees must inform their employer before the start of the financial year.
What is the tax rebate under Section 87A?
In New Regime, if your taxable income is up to ₹7 lakh, you get a rebate of up to ₹25,000, making your tax liability zero. In Old Regime, the limit is ₹5 lakh with rebate up to ₹12,500.
Can I switch between regimes every year?
Yes, for salaried employees and individuals (not businesses), you can switch between New and Old Regime every financial year. However, businesses and professionals who opt for New Regime cannot switch back.
What is the Standard Deduction in New Regime?
From FY 2024-25, Standard Deduction in New Regime is ₹75,000 (increased from ₹50,000). This is automatically deducted from your gross salary without any proof required.
Which regime is better for ₹12 lakh salary?
For ₹12 lakh salary with minimal deductions (only standard deduction), New Regime saves more tax (approx ₹1.1L vs ₹1.4L in Old). But if you have HRA + 80C + 80D totaling ₹3L+, Old Regime becomes better.
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