Old vs New Tax Regime
Both regimes tax the same income differently. The right one depends entirely on how much you actually claim in deductions — not on which one sounds simpler.
Your real numbers, not a generic example
Your situation
Should I choose the Old or New tax regime on ₹12,00,000 income?
Choose the New Regime.
Even with ₹1,50,000 in claimed deductions, the New Regime's ₹0 tax beats the Old Regime's ₹1,17,000 by ₹1,17,000.
The tax gap between regimes holds across a reasonable range of deduction estimates.
Evidence
Gross annual income
₹12,00,000
Deductions claimed (80C etc.)
₹1,50,000
Tax under Old Regime
₹1,17,000
Tax under New Regime
₹0
Alternatives considered
- Old Regime instead−₹1,17,000 more tax paid per year
Valid for FY 2025-26 slabs. Re-check if your actual deductions differ meaningfully from ₹1,50,000, or after the next Union Budget.
Monitor: your actual claimed deductions at filing time
Computed live from your inputs, not a template — try adjusting the numbers above.
This comparison assumes
- FY 2025-26 slabs, for a salaried individual below 60.
- Standard deduction applied automatically: ₹75,000 (New Regime) or ₹50,000 (Old Regime).
- No other deductions beyond what you've entered above — Section 80D health insurance and NPS (80CCD(1B)) aren't included, so add those separately if they apply to you.
Side by side
| Factor | Old Regime | New Regime (FY 2025-26) |
|---|---|---|
| Tax-free slab | Up to ₹2,50,000 | Up to ₹4,00,000 |
| Highest slab (30%) | Above ₹10,00,000 | Above ₹24,00,000 |
| Rebate (nil tax) threshold | Taxable income up to ₹5,00,000 | Taxable income up to ₹12,00,000 |
| Section 80C, 80D, HRA, home loan interest | Allowed | Not allowed |
| Standard deduction (salaried) | ₹50,000 | ₹75,000 |
| Filing complexity | Higher — needs proof of every claimed deduction | Lower — nothing to prove or track |
Who should choose which
Old Regime
Typical user: has a home loan, invests in 80C instruments, or pays significant rent in a metro.
Best for
People whose 80C + home loan interest + HRA together exceed roughly ₹4-5 lakh a year.
Not for you if you have no home loan, little to no 80C investment, and pay modest or no rent — you won't have enough deductions to beat the New Regime.
New Regime
Typical user: doesn't invest specifically for tax breaks, rents modestly or lives with family, no home loan.
Best for
Most salaried taxpayers with few or no claimed deductions — which, under FY 2025-26 slabs, is now the majority.
Not for you if you're carrying a large home loan, maxing out 80C, and paying high metro rent — you'd be walking away from deductions worth more than the simplicity.
Pros and cons
Old Regime
- Rewards genuine long-term saving and a home loan
- Needs proof for every deduction claimed at filing time
New Regime
- Simple — nothing to track, prove, or lock money into
- No benefit for a home loan, 80C investments, or high rent already committed to
Related calculators
Old vs New Tax Regime: A Plain-Language GuideFrequently asked questions
Can I switch regimes every year?
Which regime is the default now?
Does this comparison account for HRA and home loan interest?
Slab data verified for FY 2025-26 (Union Budget, February 2025). Read our Methodology and Editorial Policy.