New Regime vs Old Regime — which should you pick?
Since FY 2023-24 the New Regime is the default. It has wider, lower slabs and — after Budget 2025 — a Section 87A rebate that makes income up to ₹12 lakh tax-free. The trade-off is that it removes almost every deduction and exemption.
The Old Regime keeps higher rates but lets you reduce taxable income with 80C investments, 80D health insurance, HRA, home-loan interest and NPS. If your deductions are large, the Old Regime can still win. This calculator runs both and tells you the cheaper one.
New Regime slabs (FY 2025-26)
- Up to ₹4,00,000 — Nil
- ₹4,00,000 – ₹8,00,000 — 5%
- ₹8,00,000 – ₹12,00,000 — 10%
- ₹12,00,000 – ₹16,00,000 — 15%
- ₹16,00,000 – ₹20,00,000 — 20%
- ₹20,00,000 – ₹24,00,000 — 25%
- Above ₹24,00,000 — 30%
A standard deduction of ₹75,000 applies to salaried taxpayers, plus a 4% health & education cess on the tax.
Old Regime slabs (below 60)
- Up to ₹2,50,000 — Nil
- ₹2,50,000 – ₹5,00,000 — 5%
- ₹5,00,000 – ₹10,00,000 — 20%
- Above ₹10,00,000 — 30%
Standard deduction ₹50,000, §87A rebate up to ₹5 lakh taxable income, plus 4% cess.
The Section 87A rebate & marginal relief
Under the New Regime, if your taxable income is up to ₹12 lakh you pay no tax — the rebate wipes out the liability. Just above ₹12 lakh, marginal relief ensures your extra tax never exceeds the income above ₹12 lakh, so there is no sudden cliff.
Frequently asked questions
Which is better — the New or Old tax regime?
It depends on your deductions. The New Regime has lower slab rates and a higher ₹12 lakh rebate threshold but allows almost no deductions. The Old Regime lets you claim 80C, 80D, HRA, home-loan interest and more. This calculator computes tax under both and shows which leaves you paying less.
How much income is tax-free under the New Regime in FY 2025-26?
Thanks to the Section 87A rebate, a resident individual pays zero tax up to ₹12 lakh of taxable income. With the ₹75,000 standard deduction, a salaried person earning up to about ₹12.75 lakh can have nil tax. Marginal relief softens the jump just above ₹12 lakh.
What are the New Regime slabs for FY 2025-26?
Nil up to ₹4 lakh; 5% from ₹4–8 lakh; 10% from ₹8–12 lakh; 15% from ₹12–16 lakh; 20% from ₹16–20 lakh; 25% from ₹20–24 lakh; and 30% above ₹24 lakh. A 4% health and education cess applies on the tax.
What deductions can I claim in the Old Regime?
Common ones include the ₹50,000 standard deduction, up to ₹1.5 lakh under 80C, health-insurance premiums under 80D, HRA exemption, up to ₹2 lakh of home-loan interest, and an extra ₹50,000 NPS deduction under 80CCD(1B). Enter yours above to compare.
Is this my exact tax liability?
It is a close estimate for a resident individual below 60. It excludes employer NPS contributions under 80CCD(2), detailed surcharge marginal relief, capital-gains tax and special-rate incomes. Always confirm with the Income Tax Department or a tax professional.
Figures per Union Budget 2025 for a resident individual below 60. Estimates for informational purposes only and not tax advice — verify with the Income Tax Department or a professional.