How to use this comparison
The new tax regime is the default for AY 2026-27, but the old regime can still win if you claim enough deductions. Enter your salary and the deductions you actually claim, 80C, 80D, HRA, home loan interest, and this tool computes the tax under each regime and tells you which leaves more in your pocket.
Because the new regime now makes income up to ₹12 lakh tax-free and gives a larger ₹75,000 standard deduction, it wins for most salaried people. The old regime only pulls ahead when total deductions are large.
Why the old regime needs big deductions to win
The old regime has harsher headline rates, it hits 20% at ₹5 lakh and 30% above ₹10 lakh, where the new regime spreads the same income across gentler 5%, 10% and 15% bands. So the old regime starts from a higher tax base and only becomes competitive once your deductions are large enough to pull your taxable income down substantially. As a rough guide, deductions usually need to cross ₹3.5 to ₹4 lakh before the old regime wins at higher salaries.
Deductions the two regimes allow
New regime
Only a short list survives: the ₹75,000 standard deduction for salaried individuals, the employer's NPS contribution, and a few others. Most popular deductions, 80C, 80D, HRA, are not available.
Old regime
The full menu: 80C up to ₹1.5 lakh (PF, ELSS, LIC, principal repayment), 80D for health insurance, HRA exemption, home loan interest under Section 24, NPS under 80CCD, and more. Its entire value lies in these deductions.
For a deeper walkthrough with more examples, see our old vs new regime guide. To calculate your HRA exemption precisely, use the HRA calculator.
Frequently asked
Can I switch regimes every year?
Salaried individuals without business income can choose afresh each year at the time of filing, so you can pick whichever regime is better for that year. Those with business or professional income face restrictions on switching back once they opt out of the new regime, so they should choose carefully.
Is the new regime always better?
No, but it is better for most salaried people who do not claim large deductions. It wins automatically if your deductions are modest. The old regime only wins when your combined deductions, 80C, 80D, HRA, home loan interest, are large enough to overcome its higher slab rates, usually above roughly ₹3.5 to ₹4 lakh at higher incomes.
Does the standard deduction apply in both regimes?
Yes, but at different amounts. Salaried individuals and pensioners get a ₹75,000 standard deduction under the new regime and ₹50,000 under the old regime. It is subtracted from salary automatically, with no proof required, before the slab rates apply.
What deductions am I losing if I pick the new regime?
Most of the popular ones, including 80C investments, 80D health insurance, HRA exemption and several others. You keep the ₹75,000 standard deduction and the employer NPS contribution deduction. This is the core trade-off: lower rates and a bigger standard deduction, but almost no other deductions.
Which regime should someone with a home loan choose?
It depends on the size of the interest. Home loan interest under Section 24 (up to ₹2 lakh on a self-occupied property) is only deductible under the old regime, so a large home loan can tip the balance toward the old regime. Enter your interest in the deductions field above and the tool will show you the exact comparison.