Budget 2025 increased the New Regime rebate limit to ₹12 lakh, making it the default for most taxpayers. But for those with significant deductions (80C, HRA, 80D, home loan interest), the Old Regime can still save more. Our calculator compares both regimes side-by-side with slab-wise breakdowns so you can make an informed choice before filing your ITR.
New Tax Regime Slabs for FY 2026-27
Under the New Regime: ₹0-3 lakh — Nil; ₹3-7 lakh — 5%; ₹7-10 lakh — 10%; ₹10-12 lakh — 15%; ₹12-15 lakh — 20%; Above ₹15 lakh — 30%. A standard deduction of ₹75,000 is available. Income up to ₹12 lakh (₹12.75 lakh with standard deduction) is effectively tax-free due to the Section 87A rebate.
Old Tax Regime Slabs for FY 2026-27
Under the Old Regime: ₹0-2.5 lakh — Nil (₹3 lakh for senior citizens, ₹5 lakh for super seniors); ₹2.5-5 lakh — 5%; ₹5-10 lakh — 20%; Above ₹10 lakh — 30%. Plus 4% health and education cess. The Old Regime allows deductions under 80C (₹1.5L), 80D (₹25K-₹1L), HRA, home loan interest (₹2L), and others.
When Is the Old Regime Better?
The Old Regime typically wins when your total deductions exceed ₹3.75-4 lakh. This commonly happens if you: have significant HRA exemption (metro city rent), maximize 80C (₹1.5L) + 80CCD(1B) (₹50K) + 80D (₹25K+), have a home loan with interest deduction up to ₹2 lakh, or combine multiple smaller deductions. Our calculator factors in all of these.
Budget 2025 Key Changes
Budget 2025 made the New Regime more attractive by increasing the Section 87A rebate to cover income up to ₹12 lakh (effectively ₹12.75 lakh with standard deduction). No changes were made to the Old Regime. TDS thresholds were also revised, and the concessional tax rate on foreign companies was reduced from 40% to 35%.
How to Switch Between Regimes
Salaried employees can switch between regimes every financial year by informing their employer at the start of the year for TDS purposes, and finalizing their choice when filing ITR. Business owners who opt for the Old Regime can only switch back to New once. The New Regime is the default — you must actively opt for the Old Regime if preferred.