Old regime vs new regime — which should you choose?
Since the new tax regime became the default, most salaried Indians face one question every year: is the new regime’s lower slab rates better, or does the old regime’s deductions (80C, HRA, home-loan interest) save more? This calculator computes your tax under both regimes at once for FY 2026-27 (AY 2027-28) and tells you exactly which one saves you money, and by how much.
New regime slabs (FY 2026-27)
The new regime has a ₹75,000 standard deduction and these slabs:
| Income slab | 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% |
Thanks to the Section 87A rebate, a salaried person with taxable income up to ₹12 lakh effectively pays no income tax under the new regime (with the ₹75,000 standard deduction, that covers gross salary up to about ₹12.75 lakh). A 4% Health & Education cess applies on top of the tax, and a surcharge applies at higher incomes.
Old regime slabs
The old regime keeps a ₹50,000 standard deduction and lets you claim deductions such as 80C (up to ₹1.5 lakh — EPF, ELSS, LIC, PPF, principal on home loan), 80D (health insurance), 24(b) (home-loan interest up to ₹2 lakh) and HRA. Its slabs are Nil up to ₹2.5 lakh, 5% to ₹5 lakh, 20% to ₹10 lakh, and 30% above ₹10 lakh. Senior citizens get a higher basic exemption (₹3 lakh for 60–80, ₹5 lakh for 80+).
How to decide
As a rough rule: the more deductions you genuinely claim, the more attractive the old regime becomes. If your 80C + 80D + home-loan interest + HRA together are large, enter them above and compare. If you have few deductions, the new regime’s lower rates and the ₹12 lakh rebate usually win. This tool does the exact maths for your numbers so you don’t have to guess.
Salaried employees can switch between the old and new regime each year. (Taxpayers with business income face restrictions on switching.) Verify your final figures on incometax.gov.in before filing.