Income & Deductions
Old Regime Deductions (Optional)
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New Regime Tax
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Old Regime Tax
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Old vs New Tax Regime — Which is Better?
From FY 2023-24 onwards, the new tax regime is the default. You have to actively opt into the old regime. The new regime has lower slab rates but removes most deductions. The old regime allows deductions under 80C, 80D, HRA exemption, and more.
New Regime Slabs (FY 2026-27):
₹0 – ₹4L → 0%
₹4L – ₹8L → 5%
₹8L – ₹12L → 10%
₹12L – ₹16L → 15%
₹16L – ₹20L → 20%
₹20L – ₹24L → 25%
Above ₹24L → 30%
Standard Deduction: ₹75,000 (salaried, both regimes)
Rebate 87A: Full tax rebate up to ₹12.75L net income (new regime only)
Who Should Pick New Regime?
The new regime is better if you have low deductions — typically those with less than ₹3–4 lakh in annual deductions (80C + 80D + HRA combined). Young earners, renters in non-metro cities, or people without home loans often benefit more from the new regime.
Who Should Pick Old Regime?
If you have a home loan (Section 24B), HRA exemption in a metro, full 80C investment, 80D health cover, and NPS contributions — the old regime can still save more for incomes above ₹15–20 lakh.
Frequently Asked Questions
Which tax regime is better for ₹10 lakh salary? ⌄
Under the new regime, ₹10 lakh income after ₹75,000 standard deduction = ₹9.25L taxable. Tax = ₹42,500. Under the old regime with max 80C (₹1.5L) + 80D (₹25K), taxable = ₹7.75L, tax ≈ ₹52,500. New regime wins for most ₹10L earners with average deductions.
Can I switch between old and new regime every year? ⌄
Salaried employees can switch every year. Business income taxpayers can only switch once from new to old regime. Declare your choice to your employer at the start of the financial year via Form 10-IEA.
Is HRA exempt under the new tax regime? ⌄
No. HRA exemption under Section 10(13A) is not available under the new tax regime. This is one of the biggest reasons metro city renters often still prefer the old regime.
What is the standard deduction for salaried employees? ⌄
₹75,000 per year under both old and new regimes for salaried individuals and pensioners (updated to ₹75,000 from Budget 2024 onwards). This is automatically applied — no proof required.