Which tax regime saves you more money this year?
Enter your income and deductions above to see your exact tax liability under both regimes side by side — and instantly know which one puts more money in your pocket for FY 2025-26 (AY 2026-27). The new vs old tax regime calculator does the comparison in seconds, so you don't have to juggle two spreadsheets.
This is especially useful if you're filling your employer's investment declaration, switching jobs, or just deciding whether to claim 80C and HRA or go deduction-free under the new regime.
New Regime vs Old Regime — What's Actually Different?
The table below captures the core difference between the two tax systems for FY 2025-26. Use it as a quick reference before (or after) running your numbers above.
| Feature | New Tax Regime | Old Tax Regime |
|---|---|---|
| Default status | Default from FY 2023-24 | Must be opted in explicitly |
| Standard deduction (salaried) | ₹75,000 | ₹50,000 |
| Tax-free up to (with 87A rebate) | ₹12,00,000 net taxable income; ₹12,75,000 for salaried after standard deduction | ₹5,00,000 net taxable income |
| Section 80C (PPF, ELSS, LIC, etc.) | Not available | Up to ₹1,50,000 |
| HRA exemption | Not available | Available (actual, 40/50% of basic, rent minus 10% basic) |
| Home-loan interest (Sec 24b) | Not available for self-occupied | Up to ₹2,00,000 |
| Section 80D (health insurance) | Not available | Up to ₹25,000 (₹50,000 for senior citizens) |
| NPS employer contribution (Sec 80CCD(2)) | Available (up to 14% of basic for govt, 10% for others) | Available |
| Tax slab rates | Lower (see slab table below) | Higher |
| Best for | Low deduction claimers, renters without HRA, young earners | Heavy investors — 80C maxed, HRA, home-loan interest |
Rule of thumb: If your total eligible deductions (80C + HRA + 80D + home-loan interest + others) exceed roughly ₹3.75 lakh, the old regime is likely cheaper. Below that, the new regime usually wins because of its lower slab rates. Use the calculator above to get your exact breakeven.
How to Use This New vs Old Tax Regime Calculator
- Enter your gross annual income — salary, freelance, or business income for FY 2025-26.
- Add your deductions — 80C investments, HRA, home-loan interest, 80D premiums, NPS contribution, and anything else you can claim.
- Check the result — the tool shows tax payable under each regime and highlights the one that saves you more.
- Switch and compare — adjust deduction amounts to see exactly how much each ₹ of investment changes your tax bill.
Worked Example — ₹12 Lakh Salary
Meet Priya. She earns ₹12,00,000 gross salary per year. She invests ₹1,50,000 in PPF/ELSS (80C), pays ₹1,20,000 annual rent and gets HRA exemption of ₹80,000, and pays ₹25,000 in health insurance premiums (80D).
Old regime deductions:
- Standard deduction: ₹50,000
- 80C: ₹1,50,000
- HRA exemption: ₹80,000
- 80D: ₹25,000
- Total deductions: ₹3,05,000
- Taxable income: ₹12,00,000 − ₹3,05,000 = ₹8,95,000
Old regime tax (FY 2025-26 slabs):
- ₹0–₹2.5L: Nil
- ₹2.5L–₹5L: 5% = ₹12,500
- ₹5L–₹10L: 20% on ₹3,95,000 = ₹79,000
- Tax before cess: ₹91,500 | 4% cess: ₹3,660 | Total: ₹95,160
New regime (FY 2025-26 slabs):
- Standard deduction: ₹75,000
- Taxable income: ₹12,00,000 − ₹75,000 = ₹11,25,000
- ₹0–₹4L: Nil
- ₹4L–₹8L: 5% = ₹20,000
- ₹8L–₹12L: 10% on ₹3,25,000 = ₹32,500
- Tax before cess: ₹52,500 | 4% cess: ₹2,100 | Total: ₹54,600
Verdict for Priya: The new regime saves her ₹40,560 this year, even though she has solid deductions. Her total deductions (₹3,05,000) are below the ~₹3.75L breakeven threshold.
Now try your own numbers in the calculator above — the result often surprises people.
How the Tax Is Calculated — Slabs for FY 2025-26
Both regimes use a slab system — meaning only the income that falls within each bracket is taxed at that bracket's rate. Your entire income is not taxed at the highest rate you reach.
New Regime Tax Slabs (FY 2025-26)
| Net Taxable Income | Tax Rate |
|---|---|
| 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% |
Section 87A rebate: If your net taxable income is ₹12,00,000 or less, the full tax liability is waived under the new regime (effectively zero tax). For salaried individuals, the standard deduction of ₹75,000 means zero tax up to ₹12,75,000 gross salary.
Old Regime Tax Slabs (FY 2025-26)
| Net Taxable Income | Tax Rate |
|---|---|
| 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% |
Section 87A rebate (old regime): Tax is nil if net taxable income after all deductions is ₹5,00,000 or below.
A 4% Health and Education Cess is added on top of the calculated tax under both regimes. Surcharge applies for incomes above ₹50 lakh — the results above are indicative and exclude surcharge for high earners.
The Tax Formula (Plain Words)
Step 1: Gross Income − Deductions = Net Taxable Income
Step 2: Apply slab rates to each income band
Step 3: Sum all band-wise taxes = Tax Before Cess
Step 4: Tax Before Cess × 1.04 = Total Tax Payable (incl. 4% cess)
Key Rules and Limits for FY 2025-26
- New regime is the default — if you don't tell your employer or file a specific form, you're on the new regime automatically (since FY 2023-24).
- Salaried individuals can switch between regimes every year at the time of filing their ITR. Business owners can switch back to the old regime only once.
- 80C limit: ₹1,50,000 per year (PPF, ELSS, NSC, LIC, ULIP, home-loan principal, etc.) — old regime only.
- 80D (health insurance): ₹25,000 for self/family; ₹50,000 if the insured person is a senior citizen — old regime only.
- Home-loan interest (Section 24b): Up to ₹2,00,000 for a self-occupied property — old regime only.
- NPS employer contribution (Section 80CCD(2)): Available in both regimes — up to 10% of basic salary for private employees, 14% for government employees.
- HRA exemption: Available only in the old regime; the exempt amount is the least of — actual HRA received, 50% of basic (metro) or 40% of basic (non-metro), or actual rent paid minus 10% of basic.
For the official slab structure and rebate rules, refer to the Income Tax Department (incometax.gov.in).
Practical Tips — Getting the Most from This Comparison
- Don't just look at tax saved — look at net wealth. Old-regime deductions often lock money into 80C instruments for years (PPF is 15 years). If you'd invest anyway, that's fine; if not, the tax saving isn't 'free'.
- HRA is often the hidden winner for old-regime. If you pay high rent in a metro city, HRA alone can tilt the decision. Enter your actual HRA figures in the calculator to see the real impact.
- The ₹12L zero-tax threshold is only for new regime. A common mistake is assuming ₹12L is tax-free under the old regime too — it's not. Old-regime 87A only covers up to ₹5L taxable income.
- Home-loan EMI payers: If you're paying interest on a home loan AND claiming 80C on the principal repayment, your total deductions can easily cross ₹3.75L, making the old regime worth a second look.
- Recalculate every year. Your income, rent, and investment amounts change — so does the regime that wins. Run this comparison each April before giving your employer a fresh declaration.
- Caveats: This calculator covers individual taxpayers (below 60 years). Senior citizen slabs differ slightly under the old regime. Surcharge and AMT are not included in the base output — consult a tax professional if your income exceeds ₹50 lakh.
Your data never leaves your device. All calculations run entirely in your browser — no income figures or personal details are sent to any server.
Run your numbers in the calculator above and find out in seconds which regime saves you more for FY 2025-26. For a fuller breakdown of your year-on-year tax picture, also check our Income Tax Calculator FY 2025-26 – New vs Old Regime.