New vs old tax regime for FY 2026-27
For most salaried people the new regime wins: its slabs are wider and income up to ₹12 lakh attracts no tax at all after the section 87A rebate. The old regime only pays off when your deductions are substantial, typically a large HRA claim plus a full 80C, 80D and home loan interest. The table below shows the tax under each regime, and exactly how much you would need to deduct before the old regime pulls ahead.
Tax under each regime, by salary
Old-regime figures assume no deductions beyond the standard deduction, professional tax and your own PF. The final column is the total deduction level at which the old regime would break even.
| Annual CTC | New regime tax | Old regime tax | Old regime breaks even at |
|---|---|---|---|
| ₹8,00,000 | ₹0 | ₹45,325 | ₹2,46,208 |
| ₹10,00,000 | ₹0 | ₹82,131 | ₹4,32,760 |
| ₹12,75,000 | ₹0 | ₹1,40,609 | ₹6,89,269 |
| ₹15,00,000 | ₹81,766 | ₹2,02,719 | ₹5,68,532 |
| ₹20,00,000 | ₹1,64,428 | ₹3,40,741 | ₹7,13,506 |
| ₹25,00,000 | ₹2,74,794 | ₹4,78,764 | ₹8,26,148 |
| ₹30,00,000 | ₹4,12,863 | ₹6,16,787 | ₹8,50,000 |
| ₹50,00,000 | ₹9,94,906 | ₹11,96,957 | ₹8,49,997 |
What each regime lets you claim
| Deduction | New regime | Old regime |
|---|---|---|
| Standard deduction | ₹75,000 | ₹50,000 |
| Section 87A rebate | Up to ₹60,000 (₹12L) | Up to ₹12,500 (₹5L) |
| HRA exemption | No | Yes |
| 80C, PF, ELSS, LIC | No | Up to ₹1.5 lakh |
| 80CCD(1B), NPS | No | Up to ₹50,000 |
| 80D, health insurance | No | Up to ₹1 lakh |
| 24(b), home loan interest | No | Up to ₹2 lakh |
| 80CCD(2), employer NPS | Yes, 14% of basic | Yes, 10% of basic |
| Professional tax | No | Yes |
When the old regime still wins
Three situations tip the balance. You rent an expensive home in a metro and have a large HRA component. You carry a home loan and can claim the full ₹2 lakh of interest. Or your 80C, 80CCD(1B) and 80D claims are all maxed out at once. Stack two or three of those and the old regime can beat the new one comfortably, the calculator will tell you which side of the line you fall on.
Common questions
- Which tax regime is better for FY 2026-27?
- For most salaried people claiming little beyond the standard deduction, the new regime wins. Its slabs are wider, and the section 87A rebate makes income up to ₹12 lakh tax free. The old regime only pays off if your HRA, 80C, 80D and home loan interest claims are large, typically once total deductions run into several lakh rupees.
- What deductions can I still claim in the new regime?
- The standard deduction of ₹75,000 and your employer’s NPS contribution under 80CCD(2), worth up to 14% of basic pay. Everything else, HRA exemption, 80C, 80D, home loan interest, professional tax, is only available in the old regime.
- Can I switch between regimes?
- A salaried person without business income can choose afresh each year when filing. Your employer will ask for a declaration at the start of the year for TDS purposes, but that choice is not binding on the return you eventually file.
- Which regime is the default?
- The new regime. If you say nothing, that is what applies. You have to opt in to the old one.
Rules reviewed 20 August 2026. Estimates for salaried individuals, not tax advice.