Compare when each tax regime may work better for salaried taxpayers.
Old vs new tax comparison
Change income and deductions, then switch tabs to compare tax numbers.
New Regime
Usually simpler, with fewer deductions to track. It is the default regime, so TDS follows it unless you tell your employer otherwise.
Slabs are nil up to ₹4 lakh, then 5%, 10%, 15%, 20% and 25% in ₹4 lakh steps up to ₹24 lakh, and 30% above. The standard deduction is ₹75,000, and a rebate of up to ₹60,000 applies when taxable income is ₹12 lakh or less.
Allowed items are limited: the standard deduction, the employer's NPS contribution of up to 14% of basic plus DA, and a few others. HRA, 80C, 80D and interest on a self-occupied home loan are not available.
Old Regime
Can work better when HRA, 80C, 80D, home-loan interest and other deductions are significant.
For taxpayers below 60, slabs are nil up to ₹2.5 lakh, 5% up to ₹5 lakh, 20% up to ₹10 lakh and 30% above, with a ₹50,000 standard deduction and a rebate only up to ₹5 lakh of taxable income.
Common deductions include 80C up to ₹1.5 lakh, 80D health insurance, NPS under 80CCD(1B) up to ₹50,000, HRA exemption and up to ₹2 lakh of interest on a self-occupied home loan. Requires cleaner proof management.
Worked Numbers
At ₹12 lakh of salary and no other income, new-regime tax is nil, while old-regime tax with no deductions is ₹1,63,800. At ₹15 lakh, new-regime tax is ₹97,500 including cess.
For the old regime to match that at ₹15 lakh, you need about ₹5.44 lakh of deductions and exemptions beyond the standard deduction. At ₹20 lakh, the new regime costs ₹1,92,400 and the old regime breaks even at about ₹7.08 lakh of deductions.
Example at ₹15 lakh: ₹1.5 lakh of 80C, ₹25,000 of 80D, ₹2,400 professional tax and a ₹2.4 lakh HRA exemption bring old-regime tax to ₹1,27,171, still higher. Add ₹2 lakh of home-loan interest and it falls to ₹82,181, now below the new regime.
Switching Rules
Salaried taxpayers without business income can usually pick either regime in the return each year, provided it is filed by the due date, even if TDS was deducted under the other one. If you have business or professional income, switching back and forth is restricted, so check the current rules before opting out of the new regime.
Decision Rule
Do not guess. Enter the same income in both regimes and compare total tax after deductions.
Count only deductions you will actually have and can prove. Buying insurance or locking money into a tax-saving product just to make the old regime win often costs more than the tax it saves.
Use the Income Tax Calculator for the side-by-side result, the 80C Deduction Calculator to see how much of the ₹1.5 lakh limit you already use, and the HRA Calculator to get the exempt HRA figure to plug in.