Tax Slabs at a Glance (FY 2026-27)
šļø Old Regime
- Up to ā¹2.5L ā Nil
- ā¹2.5Lāā¹5L ā 5%
- ā¹5Lāā¹10L ā 20%
- Above ā¹10L ā 30%
- All deductions available
- 80C, HRA, LTA, NPS allowed
š New Regime (Default)
- Up to ā¹4L ā Nil
- ā¹4Lāā¹8L ā 5%
- ā¹8Lāā¹12L ā 10%
- ā¹12Lāā¹16L ā 15%
- ā¹16Lāā¹20L ā 20%
- ā¹20Lāā¹24L ā 25%
- Above ā¹24L ā 30%
- Standard deduction ā¹75,000 only
From FY 2024-25 onwards, the new tax regime is the default. If you want to use the old regime, you must explicitly opt in while filing your return (or submit Form 10-IE for business income).
The Break-Even Deduction Analysis
The key question: at what deduction level does the old regime become better? Here's the crossover analysis by income bracket:
| Annual Income | New Regime Tax | Break-Even Deductions | Verdict if deductions < break-even |
|---|---|---|---|
| ā¹7 Lakh | ā¹0 (rebate) | Any amount | New regime wins |
| ā¹10 Lakh | ā¹54,600 | ~ā¹2.25 lakh | New if deductions < ā¹2.25L |
| ā¹12 Lakh | ā¹83,200 | ~ā¹2.75 lakh | New if deductions < ā¹2.75L |
| ā¹15 Lakh | ā¹1,35,200 | ~ā¹3.75 lakh | New if deductions < ā¹3.75L |
| ā¹20 Lakh | ā¹2,08,000 | ~ā¹4.5 lakh | New if deductions < ā¹4.5L |
| ā¹30 Lakh | ā¹4,42,000 | ~ā¹5.5 lakh | New if deductions < ā¹5.5L |
The break-even point is where both regimes produce the same tax liability. If your total claimable deductions exceed that figure, the old regime saves money. If not, the new regime wins.
Common Deductions in the Old Regime
Let's see what typical deductions look like for a salaried professional:
| Deduction | Section | Max Limit | Typical Claim |
|---|---|---|---|
| Standard Deduction | 16(ia) | ā¹50,000 | ā¹50,000 |
| ELSS / PPF / LIC / EPF | 80C | ā¹1,50,000 | ā¹1,50,000 |
| NPS (Employee) | 80CCD(1B) | ā¹50,000 | ā¹50,000 |
| Home Loan Interest | 24(b) | ā¹2,00,000 | ā¹1,80,000 |
| HRA | 10(13A) | Actual / formula | ā¹60,000āā¹1,80,000 |
| Medical Insurance | 80D | ā¹25,000āā¹50,000 | ā¹25,000 |
| Typical Total | ~ā¹4.5ā5 lakh |
Real-World Scenarios: Who Benefits?
Scenario A: ā¹12L income, renting, no home loan, basic 80C
Deductions: Standard (ā¹50K) + 80C (ā¹1.5L) + 80D (ā¹25K) = ā¹2.25 lakh. This is below the ā¹2.75L break-even. New regime saves ~ā¹8,000.
Scenario B: ā¹15L income, own home loan + full 80C + NPS + HRA
Deductions: Standard (ā¹50K) + 80C (ā¹1.5L) + NPS (ā¹50K) + Home loan interest (ā¹2L) = ā¹4.5 lakh. This exceeds the ā¹3.75L break-even. Old regime saves ~ā¹22,000.
Scenario C: ā¹25L income, senior-level deductions fully maxed
Total deductions ā¹5.5L or more. Old regime can save ā¹35,000āā¹60,000.
If your total deductions (80C + HRA + home loan interest + NPS + 80D) exceed 30% of your gross income, the old regime almost certainly wins. Below 20%, the new regime almost certainly wins. Between 20-30%? Use our calculator to check your exact numbers.