Tax Regime Comparator
Free online income tax calculator for FY 2025-26 (assessment year 2026-27). Compare the old tax regime—with section 80C, 80D, home loan interest, and other deductions—against the new tax regime with updated slabs, ₹75,000 standard deduction, and section 87A rebate, to estimate which option keeps more money in your pocket.
Exemptions & Deductions
These deductions are only applicable if you choose the Old Tax Regime. The standard deductions (₹75k for New, ₹50k for Old) are calculated automatically.
Tax is Equal
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Tax (Old Regime)
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Tax (New Regime)
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Both regimes offer the same tax outcome for this income profile!
Tax Comparison
Old vs new tax regime for FY 2025-26
Choosing between the old and new income tax regime affects your taxable income, TDS, and take-home pay for the whole financial year. The new regime is built around lower slab rates and a higher standard deduction for salaried taxpayers, while the old regime rewards documented investments and expenses through Chapter VI-A deductions and common salary exemptions.
This page helps salaried employees in India do a quick old vs new tax regime comparison: enter gross salary plus the main deductions you would use only in the old regime, and see approximate tax under each side before you lock your choice with your employer or in your ITR.
Key points for FY 2025-26
- Standard deduction: ₹75,000 for salaried income under the new regime vs ₹50,000 under the old regime.
- Rebate under section 87A: The new regime’s wider zero-tax band (together with the standard deduction) means many salaried people with gross income up to about ₹12.75 lakh can have no tax, subject to eligibility and marginal relief rules.
- Slabs: New-regime slabs are structured with lower rates at many income levels; the highest rate applies on taxable income above ₹24 lakh (with cess as applicable).
- Deductions: 80C, 80D, HRA, LTA, and home loan interest generally matter only if you stay on the old regime.
When the old tax regime often works better
Despite attractive new-regime slabs, the old tax regime can still win when your eligible deductions and exemptions are large relative to income. Typical building blocks include:
Section 80C
Up to ₹1,50,000 on PF, PPF, ELSS, EPF, LIC, tuition fees, and principal on a home loan (within conditions).
Section 80D
Medical insurance premiums for self, spouse, children, and parents—limits depend on age and policy type.
Section 24(b)
Interest on a home loan for a self-occupied house property (commonly capped at ₹2 lakh under current rules).
HRA and LTA
Rent-based HRA exemption and eligible LTA can materially lower taxable salary where supported by proofs.
If these add up to several lakhs a year, model them honestly in the inputs—then compare to the new regime. High earners with modest deductions often prefer the new regime; heavy borrowers and renters claiming HRA may still prefer the old one.
How this calculator works
We start from your gross annual salary. For the old regime, we subtract the standard deduction (₹50,000), then your entered amounts for 80C (capped at ₹1.5 lakh in logic), 80D-style health premium, home loan interest, and a single “other deductions / exemptions” line for things like net HRA and LTA so you can approximate total relief. For the new regime, we subtract the ₹75,000 standard deduction, apply FY 2025-26 style slab rates, apply a rebate pattern consistent with zero tax up to ₹12 lakh of taxable income, and apply a simplified marginal relief check near the rebate cut-off so tax does not spike unreasonably for slightly higher income.
Health and education cess at 4% is included on computed tax. Surcharge on high income, perquisites, capital gains, losses, and other heads are not modeled—use the result as guidance and validate with Form 16, your CA, or the official income tax utility.
Employers, Form 12BB, and switching regime
Most employers ask which regime you want at the start of the year and deduct TDS accordingly. You typically submit rent receipts, loan certificates, and investment proofs through Form 12BB (or the employer’s portal) if you choose the old regime. If you pick the new regime, do not assume those deductions will reduce TDS. You can generally reconcile final tax when filing your ITR, but matching TDS to your choice avoids surprise refunds or dues.
Disclaimer
Tax law, notifications, and surcharge or cess rules change. This tool is for education and planning only—not tax, legal, or investment advice. Confirm all figures against the Income-tax Act, applicable finance acts, and CBDT guidance for your assessment year.
Frequently asked questions
Which tax regime is better in India for FY 2025-26—old or new?
There is no single answer. The new tax regime offers wider slabs, a higher standard deduction (₹75,000 for salaried taxpayers), and a larger rebate band so many middle-income salaried people pay no tax up to about ₹12.75 lakh gross. The old regime still wins when you can claim large Chapter VI-A deductions and exemptions (for example 80C, 80D, home loan interest under section 24(b), and substantial HRA or LTA). Use a side-by-side calculator with your actual salary and deductions to see which regime yields lower tax for your numbers.
What is the standard deduction in the new tax regime for FY 2025-26?
For salaried individuals, the standard deduction under the new tax regime is ₹75,000 for FY 2025-26 (AY 2026-27). Under the old tax regime it remains ₹50,000. This amount is deducted from salary income before applying slab rates in each regime.
Is income up to ₹12 lakh tax-free in the new tax regime?
Many salaried taxpayers with gross income up to about ₹12.75 lakh can have zero tax under the new regime for FY 2025-26, because the rebate under section 87A eliminates tax on taxable income up to ₹12 lakh after the standard deduction, and marginal relief can cap tax when income is just above that band. The exact break-even depends on your salary structure and whether surcharges apply. Always confirm with Form 16 or a qualified tax professional for edge cases.
Can I claim Section 80C (PPF, ELSS, EPF) under the new tax regime?
No. Chapter VI-A deductions such as section 80C, 80D, and 80CCD(1B) (except the employer’s NPS contribution under 80CCD(2), which is excluded from salary under both regimes when eligible) are generally not available if you opt for the new tax regime. The new regime is designed around lower rates and fewer deductions rather than the old regime’s deduction-based approach.
Can I switch between the old and new tax regime every year?
Salaried individuals can typically choose their regime each financial year for TDS purposes by informing their employer in time (often via a declaration in Form 12BB or the employer’s process). For income tax return filing, individuals without business income can usually switch regimes year on year subject to rules in force for that year. Taxpayers with business or professional income face stricter rules on opting in or out of the new regime. Verify current CBDT notifications and ITR forms for your category.
What is marginal relief under section 87A in the new regime?
Marginal relief ensures that if your taxable income crosses the rebate threshold slightly, your final tax does not jump by more than the amount by which income exceeds that threshold. In practice it smooths the “cliff” at the edge of the zero-tax band. Our calculator applies a simplified marginal relief check consistent with common FY 2025-26 new-regime patterns for salaried income.
Does the old tax regime still offer rebate under section 87A?
Yes, the old regime continues to provide rebate under section 87A for resident individuals within specified taxable income limits (subject to law for the relevant year). In this tool, old-regime tax is treated as zero when taxable income after standard deduction and your entered deductions is up to ₹5 lakh, in line with a typical salaried illustration; verify against current slabs and limits for your exact situation.
Which tax regime is better for salary above ₹15 lakh or ₹20 lakh?
Higher earners often lean toward the new regime if they do not have very large deductions, because slab rates are lower. If you have sizeable 80C, 80D, home loan interest, and HRA exemptions that are fully documentable, the old regime can still be competitive. Above certain income levels surcharge and cess also matter; this calculator focuses on base tax plus health and education cess and may not model surcharge—use it for direction, not for litigation-grade precision.
Are HRA and LTA available in the new tax regime?
Generally no—exemptions such as HRA and LTA that reduce taxable salary under the old regime are not available in the same way under the new tax regime for most taxpayers. Some allowances may be notified as exempt or deductible under specific provisions; for routine salary planning, assume the new regime taxes salary more narrowly (fewer exemptions) but at lower rates.
Why might this calculator differ from my Form 16 or employer’s TDS?
Employers use your full salary components, proof of investments, perquisites, arrears, previous employer income, and exact deduction dates. This page models a simplified annual salary plus a few manual deduction buckets, applies FY 2025-26 style slabs and standard deductions, and does not include perquisites, losses, other heads of income, or surcharge. Treat the output as a planning estimate only.
What should employees keep in mind when declaring the regime to HR?
Declare your chosen regime early in the year so TDS matches your intent. If you forget, you can often reconcile in your income tax return, but cash flow from higher TDS mid-year can be painful. Keep proofs for old-regime deductions ready before submission deadlines so your employer does not disallow claims that change your year-end tax position.