Old vs new tax regime — which is better for me?
The new regime costs less unless your deductions are large, because its slabs are wider and its standard deduction is ₹75,000. The old regime only overtakes it once your deductions are large — on a ₹15 lakh salary you need roughly ₹5.5 lakh of deductions before the old regime is even marginally cheaper. Compare both on your own numbers.
Try it on your numbers in the Old vs new regime calculatorWhy the new regime usually wins
Under FY 2026-27 rules the new regime taxes nothing up to ₹4,00,000, then rises in six steps to 30% above ₹24,00,000, and gives salaried taxpayers a ₹75,000 standard deduction. The old regime has only four slabs, reaches 30% at ₹10,00,000, and gives a ₹50,000 standard deduction — but it lets you subtract 80C, 80D, home-loan interest, HRA and more before the slabs apply.
So the comparison is always the same trade: wider slabs with almost nothing subtracted, against narrower slabs with a lot subtracted. Which side wins depends entirely on how much you genuinely have to subtract.
The break-even, worked on ₹15 lakh
Take a gross salary of ₹15,00,000, salaried and below 60, in FY 2026-27. Under the new regime, taxable income is ₹14,25,000 after the ₹75,000 standard deduction, slab tax is ₹93,750, and with 4% cess the total is ₹97,500.
Under the old regime with no deductions at all, taxable income is ₹14,50,000, slab tax is ₹2,47,500 and the total is ₹2,57,400 — the new regime is ₹1,59,900 cheaper. Add a full ₹1,50,000 of 80C and the old regime still costs ₹2,10,600. Only when you stack ₹1,50,000 of 80C, ₹25,000 of 80D, ₹2,00,000 of home-loan interest and ₹1,80,000 of HRA exemption — about ₹5.55 lakh of relief — does the old regime come in at ₹95,160, finally beating the new regime by ₹2,340.
That last figure is the real headline: at this salary the old regime needs an enormous, fully-utilised deduction stack just to draw level. If your 80C is partly unfunded, or you rent nothing and own no home loan, the question answers itself.
Where the old regime does still win
The pattern to look for is several large deductions at once, all genuinely being used: a home loan running near the ₹2,00,000 interest cap under Section 24(b), rent high enough for a substantial HRA exemption, 80C actually filled to ₹1,50,000, the extra ₹50,000 of 80CCD(1B), and health premiums for yourself and senior-citizen parents. One or two of those is rarely enough; four or five can be.
Also note the ₹12,00,000 line under the new regime. Because Section 87A gives a full rebate up to ₹12,00,000 of taxable income, a gross salary of ₹12,75,000 lands exactly on it and pays no tax at all — a point at which no amount of old-regime deductions can win, since nil is already nil.
What this comparison does not include
These figures model a resident individual below 60 with salary income. They exclude surcharge on income above ₹50,00,000, capital gains, business or professional income, more than one house property, and the separate senior-citizen slabs and 80TTB. If any of those apply to you, treat the comparison as indicative and check your specific position.
Old vs new regime
Questions people ask
Which tax regime is better for a ₹15 lakh salary?
On ₹15,00,000 gross, the new regime costs ₹97,500 in FY 2026-27. The old regime costs ₹2,57,400 with no deductions, or ₹95,160 if you fully use around ₹5.55 lakh of deductions. So the new regime wins unless your deduction stack is very large.
Can I switch between the old and new regime every year?
A salaried person with no business income can generally choose afresh each assessment year when filing. Taxpayers with business or professional income face tighter rules on switching back once they have opted out. Your employer will also ask for a declaration for TDS purposes during the year.
What is the standard deduction in the new regime?
₹75,000 for salaried taxpayers in FY 2026-27, against ₹50,000 in the old regime. It applies automatically — there is nothing to invest or spend to claim it.
At what salary is income tax zero under the new regime?
Section 87A gives a full rebate up to ₹12,00,000 of taxable income. With the ₹75,000 standard deduction, a gross salary of ₹12,75,000 leaves taxable income of exactly ₹12,00,000 and produces nil tax. Just above that, marginal relief prevents the extra tax exceeding the extra income.
Do I lose HRA and 80C if I choose the new regime?
Yes — HRA exemption, 80C, 80D, self-occupied home-loan interest and most other deductions are unavailable in the new regime. Employer NPS contributions under 80CCD(2) remain deductible in both, which is why they can matter more under the new regime than people expect.
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Try it nowLast updated 5 October 2026. Figures reflect FY 2026-27 and are educational estimates, not advice. Muktify is not SEBI-registered and never recommends or ranks any instrument. How we write and check guides.