New vs Old Tax Regime — Which One Saves You More (FY 2026-27)?
Choosing the wrong tax regime can cost you thousands of rupees a year. The new regime has lower slab rates and a ₹75,000 standard deduction but almost no other deductions; the old regime keeps 80C, 80D, HRA and home-loan benefits but taxes income at higher rates. Enter your income and the deductions you would actually claim, and this tool tells you which regime wins for FY 2026-27 and by how much.
⚖️ Compare Both Regimes
How the Two Regimes Differ in FY 2026-27
| Feature | New regime (default) | Old regime |
|---|---|---|
| Standard deduction | ₹75,000 | ₹50,000 |
| Zero-tax up to | ₹12L taxable (₹60K §87A rebate) | ₹5L taxable (₹12,500 rebate) |
| 80C, 80D, HRA, home-loan interest | Not available | Available |
| Slab rates | Lower (0–30% across 7 bands) | Higher (0/5/20/30%) |
The new regime is the default for FY 2026-27, and after the rebate hike, income up to ₹12.75 lakh is effectively tax-free under it without needing any investments. The old regime only wins when your deductions are large enough to overcome its higher rates.
When the old regime still wins
The old regime typically beats the new one only if your total deductions are substantial relative to income — usually a combination of the full ₹1.5 lakh under 80C, ₹25,000–50,000 under 80D, a large HRA exemption, and up to ₹2 lakh of home-loan interest. A Mumbai or Delhi renter with a home loan can clear this bar; most salaried taxpayers without a home loan cannot.
Rule of thumb by income
At ₹10–12.75 lakh, the new regime almost always wins (tax is zero). At ₹16 lakh you need roughly ₹5.7 lakh of deductions to make the old regime worthwhile; at ₹20 lakh, about ₹7.1 lakh. For the exact slab-by-slab breakdown of either regime, use our full income tax calculator.
You can switch — but salaried vs business differs
Salaried taxpayers can choose afresh each year when filing. Those with business or professional income can switch to the old regime only once and face restrictions on switching back. Either way, your employer deducts TDS under the new regime by default unless you declare otherwise.
Worked Comparison at Different Incomes
The table assumes a salaried taxpayer and shows how much in old-regime deductions you'd need before the old regime beats the new one for FY 2026-27. Below the break-even, the new regime wins; above it, the old regime wins.
| Gross salary | New regime tax | Old regime wins only if deductions exceed |
|---|---|---|
| ₹10,00,000 | ₹0 | Can't win — new regime tax is already zero |
| ₹12,75,000 | ₹0 | Can't win — new regime tax is zero |
| ₹16,00,000 | ≈ ₹1,13,000 | ≈ ₹5.7 lakh |
| ₹20,00,000 | ≈ ₹1,92,000 | ≈ ₹7.1 lakh |
| ₹30,00,000 | ≈ ₹4,75,800 | ≈ ₹8 lakh |
Most salaried taxpayers without a home loan never clear these deduction bars, which is why the new regime is the right default for the majority. The calculator above does this comparison for your exact income and deductions in one click.
Which deductions count toward the old regime
When you enter "total old-regime deductions" above, add up everything you can genuinely claim: Section 80C (up to ₹1.5 lakh — PF, ELSS, life insurance, principal repayment, children's tuition), Section 80D health insurance premiums (₹25,000–₹1 lakh), your HRA exemption, home-loan interest under Section 24(b) (up to ₹2 lakh — see the home loan tax benefit calculator), NPS under 80CCD(1B) (₹50,000), education-loan interest under 80E, and donations under 80G. Don't include the standard deduction — the calculator applies ₹50,000 (old) and ₹75,000 (new) for you.
A quick decision checklist
- Income up to ₹12.75 lakh? New regime, almost always — tax is zero.
- No home loan and few investments? New regime.
- Big HRA + home loan + maxed 80C/80D? Run the numbers — the old regime can still win.
- Unsure? Enter both figures above; the tool tells you the rupee difference.