Old vs New Tax Regime Calculator (FY 2026-27)

Old vs new tax regime: how the choice actually works

India runs two parallel income-tax systems, and as a salaried employee you choose one each year. The new regime offers low slab rates and a generous Section 87A rebate — zero tax on taxable income up to ₹12 lakh in FY 2026-27 — but almost no deductions beyond a ₹75,000 standard deduction. The old regime charges higher rates and rebates only up to ₹5 lakh, but lets you subtract a long list of deductions: HRA exemption, 80C, 80D, home-loan interest, NPS and more. The right choice is simply whichever leaves more money in your bank account.

The honest one-line answer for most people in FY 2026-27: the new regime wins unless you have heavy deductions — typically a home loan, a big-city rent, or a disciplined investment stack. The calculator above settles it for your exact numbers, but the reasoning below helps you understand why.

The break-even number: the only figure that matters

Every comparison reduces to one question: do your total deductions clear the break-even line?Because the new regime's tax is fixed by your salary alone, and the old regime's tax falls as you add deductions, there is always a single crossover amount. Claim more than it and the old regime wins; claim less and the new regime wins. That is the number printed in bold under your result — no other calculator on the first page of Google shows it.

As a rule of thumb the break-even climbs with income — from around ₹2 lakh of deductions at a ₹8 lakh CTC to roughly ₹5–7 lakh at ₹15–20 lakh, and it spikes near a ₹12 lakh CTC where the new regime's tax is already zero (so the old regime must also reach nil tax just to tie). Standard deduction is already counted on both sides, so the break-even refers to extra deductions: HRA exemption + 80C + 80D + Section 24B home-loan interest. A salaried renter without a home loan rarely crosses it; add a ₹2 lakh home-loan-interest deduction and the maths often flips.

Which regime wins at each salary level?

The table below shows the new-regime tax at common CTCs and the total deductions you would need before the old regime overtakes it. With no deductions, the new regime wins at every salary level — which is exactly why it is now the default.

What you give up by choosing the new regime

The new regime disallows the deductions that defined Indian tax planning for decades: HRA exemption, 80C (PF, PPF, ELSS, LIC, tuition, home-loan principal), 80D health insurance, Section 24B home-loan interest, 80CCD(1B) NPS, 80E education-loan interest and 80G donations. It keeps only the ₹75,000 standard deduction and the employer's NPS contribution under 80CCD(2). For someone who was claiming ₹4–5 lakh of deductions, that is a real loss — and the reason the old regime still makes sense for them.

One practical note on switching: salaried employees can change regime every financial year, even at the time of filing, regardless of what they declared to their employer for TDS. So if your employer deducted tax under the wrong regime, you can still correct it in your return and claim the refund. People with business income are more restricted — they generally get only one switch back to the old regime in a lifetime.