Which tax regime is better for FY 2025-26?

It depends on your deductions and investments. If you have significant investments in 80C, home loan, or claim HRA, the old regime may be better. If you have minimal deductions, the new regime with lower rates is beneficial. Use our Income Tax Calculator to compare both regimes for your specific income.

Can I switch between old and new tax regime every year?

Yes, salaried individuals can choose between old and new regime every financial year. However, if you have business income, you can only switch once.

What is the standard deduction in new tax regime for FY 2025-26?

The standard deduction in the new tax regime for FY 2025-26 is ₹75,000 for salaried individuals. This was increased from ₹50,000 in Budget 2024.

Are all 80C deductions allowed in new tax regime?

No, 80C deductions (PPF, ELSS, Life Insurance, etc.) are NOT allowed in the new tax regime. Only standard deduction of ₹75,000 is available.

Which regime is default for FY 2025-26?

The new tax regime is the default regime from FY 2023-24 onwards. If you want to opt for the old regime, you need to explicitly choose it while filing your ITR.

Can I claim HRA in new tax regime?

No, HRA (House Rent Allowance) exemption is NOT available in the new tax regime. HRA benefit is only available in the old tax regime.

What is the rebate under Section 87A in both regimes?

Under new regime, rebate of up to ₹25,000 is available for income up to ₹7 lakh (effectively zero tax up to ₹7 lakh). Under old regime, rebate of ₹12,500 is available for income up to ₹5 lakh.

FY 2025-26 (AY 2026-27)

Old Tax Regime vs New Tax RegimeWhich Saves You More Tax?

Complete comparison of tax slabs, deductions, and exemptions. Calculate which regime is better for you in FY 2025-26.

Calculate Your Tax View Detailed Comparison

Traditional System

Old Tax Regime

More tax slabs but allows deductions under 80C, HRA, home loan interest, and other exemptions.

80C deductions up to ₹1.5 lakh

HRA exemption allowed

Home loan interest (₹2 lakh)

Higher tax rates

Best for: High investments & deductions

Default from FY 2023-24

New Tax Regime

Lower tax rates with more slabs but minimal deductions. Only ₹75,000 standard deduction allowed.

Lower tax rates

No tax up to ₹7 lakh

₹75,000 standard deduction

No 80C, HRA, or other exemptions

Best for: Low/no deductions

Tax Slabs Comparison FY 2025-26

Old Tax Regime Slabs

Up to ₹2,50,000

₹0

Nil

₹2,50,001 - ₹5,00,000

Upto ₹12,500

₹5,00,001 - ₹10,00,000

Upto ₹1,00,000

20%

Above ₹10,00,000

30% of excess

30%

Rebate u/s 87A

Up to ₹12,500 for income ≤ ₹5 lakh

New Tax Regime Slabs

Up to ₹3,00,000

₹0

Nil

₹3,00,001 - ₹7,00,000

Upto ₹20,000

₹7,00,001 - ₹10,00,000

Upto ₹30,000

10%

₹10,00,001 - ₹12,00,000

Upto ₹30,000

15%

₹12,00,001 - ₹15,00,000

Upto ₹60,000

20%

Above ₹15,00,000

30% of excess

30%

Rebate u/s 87A

Up to ₹25,000 for income ≤ ₹7 lakh

Deductions & Exemptions

Old Regime - Available Deductions

80C

₹1,50,000

PPF, ELSS, Life Insurance, Home Loan Principal

80D

₹25,000 - ₹50,000

Health Insurance Premium

80CCD(1B)

₹50,000

NPS Contribution

HRA

Actual HRA or 50%/40% of salary

House Rent Allowance

LTA

Actual bills

Leave Travel Allowance

24(b)

₹2,00,000

Home Loan Interest

80E

No limit

Education Loan Interest

80G

50% or 100%

Donations

New Regime - Available Deductions

None

₹75,000

Standard Deduction

None

No other deductions allowed

⚠️ Important Note

No deductions under 80C, 80D, HRA, LTA, or home loan interest are allowed in the new tax regime. Only ₹75,000 standard deduction is available.

Real Income Examples

Annual Income: ₹6,00,000

₹1,50,000 (80C)

Old Regime Tax:₹12,500

New Regime Tax:₹15,000

🎯 Old Regime Saves ₹2,500

Annual Income: ₹8,00,000

₹0

Old Regime Tax:₹62,500

New Regime Tax:₹40,000

🎯 New Regime Saves ₹22,500

Annual Income: ₹12,00,000

₹2,00,000 (80C + NPS + HRA)

Old Regime Tax:₹1,12,500

New Regime Tax:₹90,000

🎯 Old Regime Saves ₹22,500

Annual Income: ₹15,00,000

₹0

Old Regime Tax:₹2,62,500

New Regime Tax:₹1,50,000

🎯 New Regime Saves ₹1,12,500

* Examples are illustrative. Actual tax may vary based on other deductions and exemptions.

How to Decide?

OLD
Choose Old Regime If:

You invest in 80C (PPF, ELSS, Insurance)
You claim HRA exemption
You have home loan
Total deductions exceed ₹2-3 lakh

NEW
Choose New Regime If:

You have minimal investments
You don't claim HRA
Income below ₹10 lakh
You want simpler tax filing

Compare Both Regimes for Your Income

Frequently Asked Questions

Find answers to common questions

Still have questions?

Contact our experts

Need Help Choosing the Right Tax Regime?

Our tax experts will analyze your income and suggest the best regime to minimize your tax liability

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Tax Slabs Comparison FY 2025-26

Old Tax Regime Slabs

Up to ₹2,50,000

₹0

Nil

₹2,50,001 - ₹5,00,000

Upto ₹12,500

₹5,00,001 - ₹10,00,000

Upto ₹1,00,000

20%

Above ₹10,00,000

30% of excess

30%

Rebate u/s 87A

Up to ₹12,500 for income ≤ ₹5 lakh

New Tax Regime Slabs

Up to ₹3,00,000

₹0

Nil

₹3,00,001 - ₹7,00,000

Upto ₹20,000

₹7,00,001 - ₹10,00,000

Upto ₹30,000

10%

₹10,00,001 - ₹12,00,000

Upto ₹30,000

15%

₹12,00,001 - ₹15,00,000

Upto ₹60,000

20%

Above ₹15,00,000

30% of excess

30%

Rebate u/s 87A

Up to ₹25,000 for income ≤ ₹7 lakh

Deductions & Exemptions

Old Regime - Available Deductions

80C

₹1,50,000

PPF, ELSS, Life Insurance, Home Loan Principal

80D

₹25,000 - ₹50,000

Health Insurance Premium

80CCD(1B)

₹50,000

NPS Contribution

HRA

Actual HRA or 50%/40% of salary

House Rent Allowance

LTA

Actual bills

Leave Travel Allowance

24(b)

₹2,00,000

Home Loan Interest

80E

No limit

Education Loan Interest

80G

50% or 100%

Donations

New Regime - Available Deductions

None

₹75,000

Standard Deduction

None

No other deductions allowed

⚠️ Important Note

No deductions under 80C, 80D, HRA, LTA, or home loan interest are allowed in the new tax regime. Only ₹75,000 standard deduction is available.

Real Income Examples

Annual Income: ₹6,00,000

₹1,50,000 (80C)

Old Regime Tax:₹12,500

New Regime Tax:₹15,000

🎯 Old Regime Saves ₹2,500

Annual Income: ₹8,00,000

₹0

Old Regime Tax:₹62,500

New Regime Tax:₹40,000

🎯 New Regime Saves ₹22,500

Annual Income: ₹12,00,000

₹2,00,000 (80C + NPS + HRA)

Old Regime Tax:₹1,12,500

New Regime Tax:₹90,000

🎯 Old Regime Saves ₹22,500

Annual Income: ₹15,00,000

₹0

Old Regime Tax:₹2,62,500

New Regime Tax:₹1,50,000

🎯 New Regime Saves ₹1,12,500

* Examples are illustrative. Actual tax may vary based on other deductions and exemptions.

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Old Tax Regime vs New Tax RegimeWhich Saves You More Tax?

Tax Slabs Comparison FY 2025-26

Deductions & Exemptions

Real Income Examples

OLD
Choose Old Regime If:

NEW
Choose New Regime If:

Frequently Asked Questions

Need Help Choosing the Right Tax Regime?

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Old Tax Regime vs New Tax RegimeWhich Saves You More Tax?

Tax Slabs Comparison FY 2025-26

Deductions & Exemptions

Real Income Examples

OLD
Choose Old Regime If:

NEW
Choose New Regime If:

Frequently Asked Questions

Need Help Choosing the Right Tax Regime?

Old Tax Regime vs New Tax RegimeWhich Saves You More Tax?

Tax Slabs Comparison FY 2025-26

Deductions & Exemptions

Real Income Examples

OLDChoose Old Regime If:

NEWChoose New Regime If:

Frequently Asked Questions

Which tax regime is better for FY 2025-26?

Can I switch between old and new tax regime every year?

What is the standard deduction in new tax regime for FY 2025-26?

Are all 80C deductions allowed in new tax regime?

Which regime is default for FY 2025-26?

Can I claim HRA in new tax regime?

What is the rebate under Section 87A in both regimes?

Need Help Choosing the Right Tax Regime?

Old Tax Regime vs New Tax RegimeWhich Saves You More Tax?

Tax Slabs Comparison FY 2025-26

Deductions & Exemptions

Real Income Examples

OLDChoose Old Regime If:

NEWChoose New Regime If:

Frequently Asked Questions

Which tax regime is better for FY 2025-26?

Can I switch between old and new tax regime every year?

What is the standard deduction in new tax regime for FY 2025-26?

Are all 80C deductions allowed in new tax regime?

Which regime is default for FY 2025-26?

Can I claim HRA in new tax regime?

What is the rebate under Section 87A in both regimes?

Need Help Choosing the Right Tax Regime?

OLD
Choose Old Regime If:

NEW
Choose New Regime If:

OLD
Choose Old Regime If:

NEW
Choose New Regime If: