Old vs New Tax Regime 2026 — Which Saves More Tax?
New regime has lower slab rates but NO deductions. Old regime has higher rates but allows 80C, HRA, 80D deductions. Your choice depends on your deduction profile.
📊Tax Slab Comparison FY 2025-26
| Income Range | Old Regime Rate | New Regime Rate |
|---|---|---|
| Up to ₹2.5L | Nil | Nil |
| ₹2.5L - ₹3L | 5% | Nil (₹3L exemption) |
| ₹3L - ₹5L | 5% | 5% |
| ₹5L - ₹6L | 20% | 5% |
| ₹6L - ₹7L | 20% | 10% |
| ₹7L - ₹9L | 20% | 10% |
| ₹9L - ₹10L | 20% | 15% |
| ₹10L - ₹12L | 30% | 15% |
| ₹12L - ₹15L | 30% | 20% |
| Above ₹15L | 30% | 30% |
🧮Quick Decision Formula
Calculate your total deductions under old regime: 80C (max ₹1.5L) + 80D (health insurance ₹25K-1L) + HRA exemption + home loan interest (80EEA/24b) + NPS 80CCD(1B) ₹50K + standard deduction ₹50K (both regimes get this in new regime now).
If total deductions > ₹3.75 lakh: Old regime likely saves more tax.
If total deductions < ₹3.75 lakh: New regime likely saves more tax.
Example 1: Salaried person, ₹12 LPA, lives in rented flat in Delhi. Deductions: 80C (₹1.5L) + HRA (₹1.8L) + 80D (₹25K) + NPS (₹50K) = ₹4.05L total. Old regime saves ₹15,000-30,000 more tax than new.
Example 2: Salaried person, ₹12 LPA, lives in own home (no HRA), minimal investments. Deductions: 80C (₹50K) + 80D (₹25K) = ₹75K total. New regime saves ₹40,000-60,000 more tax.
Example 3: Salary above ₹20 LPA with maximum deductions. Almost always old regime wins at very high incomes with full deductions. But many high-earners choose new regime for simplicity.
❌Deductions You LOSE in New Regime
NOT available in new regime: Section 80C (PPF, ELSS, LIC, etc.), Section 80D (health insurance premium), HRA exemption, Leave Travel Allowance, Home loan interest deduction (Section 24b for self-occupied), Section 80E (education loan interest), Section 80G (donations), Professional tax.
AVAILABLE in both regimes: Standard deduction ₹75,000 (from FY 2024-25 in new regime), Employer's NPS contribution (Section 80CCD(2)), Agniveer contribution.