Since the introduction of the New Tax Regime, choosing between "Old" and "New" has become one of the most common questions salaried taxpayers ask their CA every year. The two regimes have fundamentally different structures: the Old Regime has fewer, wider slabs but allows deductions like Section 80C, 80D, HRA, and home loan interest; the New Regime has more, narrower slabs with lower rates but strips away almost all deductions.
There is no single answer that fits everyone — the better regime depends entirely on how much you can genuinely claim in deductions. Someone with a large home loan, substantial 80C investments, and HRA exemption often does better under the Old Regime. Someone with fewer investments and no home loan or rented accommodation usually comes out ahead under the New Regime, thanks to its lower slab rates and the enhanced Section 87A rebate.
This calculator computes your tax liability under both regimes simultaneously using FY 2026-27 slabs as per Union Budget 2026, factoring in your age category, standard deduction, and the deductions you enter, so you can see the actual rupee difference before deciding.
The New Tax Regime is the default regime. If you want to be taxed under the Old Regime, you need to specifically opt for it while filing your return (salaried individuals can choose either regime each year).
Salaried individuals without business income can switch between the Old and New Regime every financial year. Those with business or professional income have more restricted switching rules.
Yes — the standard deduction for salaried individuals, employer's NPS contribution under Section 80CCD(2), and a few others are still allowed under the New Regime, though most common deductions like 80C and HRA are not.
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