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Old vs new tax regime — FY 2026-27

Enter your salary and the deductions you could actually claim. Both regimes are computed on this year's slabs, side by side — and if the new regime wins, you'll see exactly how far the old one is from catching up.

FY 2026-27 (AY 2027-28) slabs · Section 87A rebate, surcharge and 4% cess applied · runs entirely in your browser.

The NEW regime is cheaper for you
by ₹1,63,800 this year
New regime — tax
₹0
Old regime — tax
₹1,63,800
New taxable income
₹11,25,000
Old taxable income
₹11,50,000
The old regime would need about ₹6,50,000 MORE in deductions than you entered before it broke even.
See both regimes on your real numbers →

The landmarks that decide most cases

  • ₹12.75 lakh of salary = zero tax under the new regime. The ₹75,000 standard deduction brings taxable income to ₹12,00,000, and the Section 87A rebate (up to ₹60,000) wipes the tax entirely. Just past it there is no cliff: marginal relief caps your tax at the amount by which you crossed, so ₹5,000 of extra salary costs about ₹5,200 — not the ₹63,180 a naive slab table shows. Both reliefs, and the one cliff that is real →
  • The old regime only wins on big deductions. Its slabs are harsher (20% starts at ₹5,00,001 of taxable income), so it needs serious deductions — 80C, HRA, home-loan interest — to overcome the new regime's head start.
  • Both regimes are computed fresh each year. Salaried taxpayers can switch at filing time, so the right answer is whichever is cheaper THIS year, not loyalty to either.

The stale advice still doing the rounds

You'll still find articles claiming the old regime wins once deductions cross "₹3.5–4 lakh." That figure predates the current slabs and is simply wrong now. With the ₹12 lakh rebate ceiling and the larger standard deduction, the break-even sits far higher — at a ₹15 lakh salary the old regime needs roughly ₹6 lakh of deductions before it draws level. And below about ₹12.75 lakh of salary the old regime cannot win at all: the new regime's tax is already zero, and there is nothing left to beat.

What that means in practice: if you earn under ₹12.75L, stop optimising — take the new regime and invest for returns, not for 80C. Above it, add up your real deductions honestly before committing to old-regime instruments you'd otherwise not choose.

How much deduction the old regime actually needs

The honest way to answer “which regime?” is to ask what the old one has to find before it draws level. Run through this tool’s own engine, for a salaried filer claiming nothing else:

  • ₹8 lakh salary — new regime tax ₹0. The old regime needs about ₹2.5 lakh of deductions merely to match zero.
  • ₹12 lakh — new regime ₹0 again. The old regime needs roughly ₹6.5 lakh.
  • ₹15 lakh — new ₹97,500 against old ₹2,57,400. Break-even at about ₹5.45 lakh.
  • ₹20 lakh — new ₹1,92,400 against old ₹4,13,400. Break-even near ₹7.1 lakh.
  • ₹25 lakh and above — the requirement settles around ₹8 lakh of deductions.

Set that against what is actually claimable. Section 80C caps at ₹1.5 lakh, 80CCD(1B) adds ₹50,000, 80D is typically ₹25,000–₹50,000, and Section 24(b) on a self-occupied house adds at most ₹2 lakh. That is around ₹4.5 lakh at full stretch. Everything above it has to come from HRA — which is why the old regime still wins for people paying serious rent in a metro, and almost nobody else.

What you give up by choosing the new regime

The new regime’s lower slabs are paid for by removing most deductions. Worth knowing exactly which, because people often keep funding an instrument whose tax benefit they no longer receive:

  • Gone: 80C (PPF, ELSS, life premium, principal repayment), 80CCD(1B) for NPS, 80D for health premiums, HRA exemption, LTA, and Section 24(b) interest on a self-occupied house.
  • Kept: the ₹75,000 standard deduction for salaried filers, and the employer’s NPS contribution under 80CCD(2), which is one of the few genuine planning levers left.
The behavioural trap. An ELSS or a PPF contribution made purely for 80C stops being a tax decision the moment you move to the new regime — it becomes an ordinary investment, to be judged on its own merits and its lock-in. Plenty of people carry on funding both regardless. If you are on the new regime, ask whether you would still choose that instrument with no deduction attached. Often the answer is no.

The deduction people forget to count properly

Home-loan interest under Section 24b is capped at ₹2,00,000 for a self-occupied house — and it's the deduction people most often estimate from memory. The interest falling in a financial year comes off your amortisation schedule, not off 12 × EMI. If you're weighing a prepayment, the prepay-vs-invest calculator shows how the cap changes that decision too.