Old vs New Tax Regime Calculator
Compare India's two tax regimes side by side and pick the cheaper one.
15 LPA
80C, HRA, home-loan interest, NPS, etc.
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New regime
Saves about ₹97,500 per year vs the other regime
| New regime | Old regime | |
|---|---|---|
| Standard deduction | ₹75,000 | ₹50,000 |
| Other deductions | — | ₹2,00,000 |
| Income tax + cess | ₹1,00,000 | ₹1,97,500 |
| Net (take-home) | ₹13,28,000 | ₹12,30,500 |
Estimate only — not tax advice. Figures are estimates based on publicly available tax rules and may not reflect your full circumstances. See our methodology & sources. Always confirm with an official tax authority or a licensed adviser before making decisions.
India runs two parallel income-tax systems. The new regime (now the default) has lower rates and a large §87A rebate that makes income up to ₹12 lakh effectively tax-free, but removes most deductions. The old regime keeps higher rates but lets you claim 80C, HRA, home-loan interest and more.
Enter your salary and the deductions you'd realistically claim, and this calculator computes your tax under both regimes side by side, then tells you which one leaves more in your pocket. Salaried taxpayers can switch regime each year, so it's worth re-checking annually.
What the choice actually is
India runs two parallel personal income tax systems. The new regime has wider slabs and lower rates but removes most exemptions and deductions. The old regime has narrower slabs and higher rates but lets you subtract HRA, 80C investments, 80D health premiums, home-loan interest and a long list of smaller items before tax is computed.
So the question is not which regime has better rates, because the new one does. It is whether your deductions are large enough to overcome the difference. That crossover point moves with your salary, so a colleague's answer tells you nothing about yours.
What tips the balance
The old regime tends to win for people carrying large, genuine deductions: significant rent in a metro claimed through HRA, a home loan with meaningful interest, a fully used 80C limit, and health insurance for a family including parents. Stacked together, those can shelter a large share of income.
The new regime tends to win for people without those: early-career earners living at home or in cheap housing, anyone whose 80C is mostly notional, and higher earners whose deductions are capped well below the rate advantage the wider slabs give them. It also wins on effort, since there are no receipts, no proofs and no investment decisions made purely to reduce tax.
Choosing, and changing your mind
The new regime is the default. Salaried taxpayers without business income can switch between the two each assessment year, so the choice is not permanent; taxpayers with business income face tighter restrictions on switching back. Your employer will ask for a declaration at the start of the year to set TDS, but the final position is settled when you file.
The practical order is: work out your deductions honestly, run both regimes against them, and only then decide. Investing purely to save tax under the old regime is worth it only if you would have wanted the underlying investment anyway. A lock-in you did not want is a poor trade for a marginal tax saving.
Related
Frequently Asked Questions
+Which tax regime is better in India?
The new regime wins for most people thanks to lower rates and the large rebate. The old regime can win if you claim substantial deductions (80C, HRA, home-loan interest). Compute both — this tool does it instantly.
+Can I switch tax regimes every year?
Salaried individuals can choose their regime each financial year. Those with business income face restrictions on switching back to the new regime once they opt out. Always compare before filing.
Estimate only — not tax advice. Figures are estimates based on publicly available tax rules and may not reflect your full circumstances. See our methodology & sources (last reviewed June 2026). Always confirm with an official tax authority or a licensed adviser before making decisions.