Old vs New Tax Regime Calculator
| Income Slab | Old Rate | Old Tax | New Rate | New Tax |
|---|
What This Tool Does
This old vs new tax regime calculator compares your income tax liability under both regimes for FY 2026-27, based on your income and deductions, showing which one results in lower tax and by how much.
You can also use this Dhan Brokerage Calculator.
How It’s Calculated
New Regime: Gross Income ā Standard Deduction (ā¹75,000) = Taxable Income, then apply new regime slabs. If taxable income is ā¹12 lakh or below, a Section 87A rebate of up to ā¹60,000 wipes out the tax entirely ā effectively making salaries up to ā¹12.75 lakh tax-free.
New regime slabs (FY 2026-27, unchanged from FY 2025-26):
| Income | Rate |
|---|---|
| Up to ā¹4L | Nil |
| ā¹4Lāā¹8L | 5% |
| ā¹8Lāā¹12L | 10% |
| ā¹12Lāā¹16L | 15% |
| ā¹16Lāā¹20L | 20% |
| ā¹20Lāā¹24L | 25% |
| Above ā¹24L | 30% |
Old Regime: Gross Income ā Standard Deduction (ā¹50,000) ā deductions (80C up to ā¹1.5L, 80D, 80CCD(1B) up to ā¹50,000, HRA exemption, Section 24(b) home loan interest up to ā¹2L, etc.) = Taxable Income, then apply old regime slabs (0ā2.5L nil, 2.5ā5L @5%, 5ā10L @20%, above 10L @30%).
Worked example: ā¹18,00,000 gross salary, with old regime deductions totalling ā¹6,05,000 (ā¹1.5L under 80C, ā¹25,000 under 80D, ā¹50,000 under 80CCD(1B), ā¹1.8L HRA exemption, ā¹2L home loan interest).
- Old regime taxable income: 18,00,000 ā 50,000 ā 6,05,000 = ā¹11,45,000
- Old regime tax: 12,500 + 1,00,000 + 43,500 = ā¹1,56,000 ā with 4% cess ā ā¹1,62,240
- New regime taxable income: 18,00,000 ā 75,000 = ā¹17,25,000
- New regime tax: 20,000 + 40,000 + 60,000 + 25,000 = ā¹1,45,000 ā with 4% cess ā ā¹1,50,800
Even with substantial deductions claimed, the new regime saves about ā¹11,440 in this example ā illustrating why deduction-heavy old regime planning doesn’t always win at every income level.
Edge Cases and Special Rules
- New regime is the default since FY 2024-25: You must actively opt for the old regime if you want it ā it’s no longer selected automatically.
- Most old-regime deductions aren’t available under the new regime: 80C, 80D, HRA exemption, and Section 24(b) home loan interest on a self-occupied property don’t apply under the new regime.
- Employer NPS contribution is an exception: Section 80CCD(2) is available under both regimes, with a higher cap under the new regime (14% of basic salary) than the old regime (10% of basic salary).
- Surcharge is capped lower under the new regime: At very high incomes, new regime surcharge is capped at 25%, while old regime surcharge can go higher ā a factor that matters increasingly above ā¹50L.
- Switching flexibility differs by income type: Salaried individuals filing ITR-1/ITR-2 can switch between regimes every year; those with business or professional income face restrictions once they’ve opted out of the new regime.
When Each Regime Tends to Win
There’s a general pattern, though individual circumstances vary. The new regime tends to win for incomes up to roughly ā¹12.75 lakh (where it’s effectively tax-free), and often for middle incomes without significant deductions. The old regime tends to win when you’re claiming a substantial combination of deductions together ā particularly high rent in a metro city (large HRA exemption), a home loan on a self-occupied property (up to ā¹2L interest deduction), and full utilization of 80C and 80D. As income rises, the deduction amount needed to make the old regime worthwhile also rises, since the new regime’s lower rates apply to more of your income.
Who Uses This
- Salaried employees deciding which regime to declare to their employer for TDS purposes
- Employees with a home loan or high rent comparing the actual rupee benefit of each regime
- HR and payroll teams helping employees understand their options
- Anyone reassessing their choice at the start of a new financial year
Breakeven Deduction Point vs. Total Tax Savings
These are two different numbers this kind of calculator shows. The breakeven deduction point is the total deduction amount at which both regimes produce exactly equal tax ā below that point, the new regime wins; above it, the old regime wins. Total tax savings is the actual rupee difference between the two regimes at your specific, real deduction level ā which could be far from the breakeven point in either direction. Knowing the breakeven point helps you judge how much additional tax planning (like increasing 80C investments) would actually be worth pursuing.
FAQ
Which tax regime is better?
It depends on your income and deductions ā there’s no universal answer, so compare both using your actual figures.
Is the new regime now the default?
Yes, since FY 2024-25 ā you must actively choose the old regime if you prefer it.
Can I switch tax regimes every year?
Salaried individuals filing ITR-1/ITR-2 generally can; those with business income face restrictions after opting out of the new regime once.
Does HRA exemption work under the new regime?
No ā HRA exemption is only available under the old regime.
What’s the maximum tax-free salary under the new regime for FY 2026-27?
Up to ā¹12.75 lakh, due to the ā¹75,000 standard deduction combined with the Section 87A rebate.
Try It Above
Enter your income and deduction details in the calculator above to compare your exact tax liability under both regimes. This is general information, not personalized tax advice ā consult a chartered accountant for guidance specific to your situation.