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New vs Old Tax Regime: Which Should You Choose for FY 2025-26?
The new regime is the default for FY 2025-26, but the old regime remains useful when deductions and exemptions are high. The right choice depends on your salary structure, investments, rent, home loan and capital gains.
New regime slabs
| Income slab | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4-8L | 5% |
| ₹8-12L | 10% |
| ₹12-16L | 15% |
| ₹16-20L | 20% |
| ₹20-24L | 25% |
| Above ₹24L | 30% |
Old regime slabs
| Income slab | Rate |
|---|---|
| ₹0-₹2.5L | Nil |
| ₹2.5-5L | 5% |
| ₹5-10L | 20% |
| Above ₹10L | 30% |
Under the old regime, the basic exemption is ₹3L for age 60-80 and ₹5L for age 80+. Salary standard deduction is ₹50,000. Section 87A rebate is up to ₹12,500 when total income is up to ₹5,00,000.
Deductions and exemptions compared
| Item | New regime | Old regime |
|---|---|---|
| Salary standard deduction | ₹75,000 | ₹50,000 |
| 80C up to ₹1.5L | No | Yes |
| 80D health insurance | No | Yes |
| HRA and LTA | No | Yes |
| Self-occupied home loan interest up to ₹2L | No | Yes |
| 80CCD(1B) ₹50,000 NPS | No | Yes |
| Employer NPS u/s 80CCD(2) | Yes, up to 14% of basic salary | Yes |
| 80TTA/80TTB | No | Yes |
Break-even guidance
The new regime often wins when you do not claim many deductions, because it has lower slabs and a ₹12,00,000 rebate. The old regime can win when rent, 80C, 80D, NPS, LTA and home-loan interest together create a large deduction base. Compare both every year instead of assuming last year's choice still works.
Who should consider each regime?
New regime may suit you if
You have simple salary income, few exemptions, limited deductions and total income near the rebate range. See the detailed new regime slab guide.
Old regime may suit you if
You actively use deductions such as 80C, 80D, HRA, LTA, NPS and home-loan interest. Review the deductions guide before choosing.
Compare both regimes in minutes
Enter your income and deductions to estimate which regime gives a lower tax.
Open Calculator →FAQ
Is the new tax regime the default for FY 2025-26?
Yes. The new tax regime is the default, but eligible taxpayers can choose the old regime if it gives a lower tax outgo.
Who usually benefits from the new regime?
Taxpayers with limited deductions, no HRA claim and no large old-regime investments often benefit from the new regime slabs and ₹12,00,000 rebate.
Who usually benefits from the old regime?
The old regime can help taxpayers with significant deductions such as 80C, 80D, HRA, LTA, NPS under 80CCD(1B), and self-occupied home loan interest.
Can salary standard deduction be claimed in both regimes?
Yes, but the amount differs: ₹75,000 in the new regime and ₹50,000 in the old regime.