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New vs Old Tax Regime: Which Saves You More Tax?
1 Oct 2026You can choose between two tax regimes. The new regime has lower rates and fewer deductions. The old regime has higher rates but allows deductions such as 80C, HRA and home loan interest.
The new regime for FY 2026-27
| Taxable income | Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 to 8 lakh | 5% |
| ₹8 to 12 lakh | 10% |
| ₹12 to 16 lakh | 15% |
| ₹16 to 20 lakh | 20% |
| ₹20 to 24 lakh | 25% |
| Above ₹24 lakh | 30% |
A standard deduction of ₹75,000 applies for salaried people, and a rebate makes tax nil for taxable income up to ₹12 lakh. So salaried income up to ₹12.75 lakh can pay no tax.
Tax at different incomes
Salaried, below 60. The old regime assumes ₹2 lakh of deductions (₹1.5 lakh under 80C and ₹50,000 other), plus the ₹50,000 standard deduction.
| Income | New regime | Old regime |
|---|---|---|
| ₹12 lakh | ₹0 | ₹1.07 lakh |
| ₹15 lakh | ₹97,500 | ₹1.95 lakh |
| ₹20 lakh | ₹1.92 lakh | ₹3.51 lakh |
| ₹30 lakh | ₹4.76 lakh | ₹6.63 lakh |
These include 4% cess and exclude surcharge.
When does the old regime win?
Only if your deductions are large. At ₹15 lakh income, you need roughly ₹5.4 lakh of deductions on top of the standard deduction. At ₹20 lakh it is about ₹7.1 lakh.
How to decide
- List your yearly deductions: 80C, health insurance, home loan interest, HRA, NPS.
- Enter them in the Income Tax Calculator.
- Pick the lower tax.
Tax rules change, so confirm the latest rules before filing. This is general information, not tax advice.
Try the Income Tax Calculator