Old vs New Tax Regime FY 2025-26: Which Saves You More?
Complete comparison of old and new income tax regimes for FY 2025-26. Exact tax calculations for 5 salary levels — ₹8L, ₹12L, ₹15L, ₹20L, ₹30L — with deductions.
New Tax Regime Slabs — FY 2025-26
| Taxable Income Slab | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Plus 4% health and education cess on tax. Section 87A rebate: zero tax if taxable income ≤ ₹12,00,000. Standard deduction: ₹75,000.
Old Tax Regime Slabs — FY 2025-26
| Taxable Income | General (<60) | Senior (60–79) | Super Senior (80+) |
|---|---|---|---|
| Up to ₹2.5L | Nil | Nil | Nil |
| ₹2.5L–₹3L | 5% | Nil | Nil |
| ₹3L–₹5L | 5% | 5% | Nil |
| ₹5L–₹10L | 20% | 20% | 20% |
| Above ₹10L | 30% | 30% | 30% |
Standard deduction ₹50,000. Section 87A rebate: zero tax if income ≤ ₹5,00,000. Allows 80C, HRA, 80D, 24(b), etc.
5 Salary Scenarios — Which Regime Saves More?
| Gross Salary | New Regime Tax | Old Regime Tax* | Winner |
|---|---|---|---|
| ₹8 Lakh | ₹0 | ₹0 | Tie (zero tax in both) |
| ₹12 Lakh | ₹0 | ₹0 | Tie (zero tax in both) |
| ₹15 Lakh | ₹31,200 | ₹26,000 | Old (saves ₹5,200) |
| ₹20 Lakh | ₹93,600 | ₹72,800 | Old (saves ₹20,800) |
| ₹30 Lakh | ₹2,08,000 | ₹1,56,000 | Old (saves ₹52,000) |
*Old regime assumes: standard deduction ₹50K + full 80C ₹1.5L + HRA ₹1.68L (metro, 40% basic) + 80D ₹25K. Actual savings depend on your deductions.
The Break-Even Deduction Amount
The new regime is simpler but not always cheaper. The break-even point — where both regimes give the same tax — is when your total deductions exceed approximately ₹4–5 lakh (at ₹15–20L salary). Beyond this, old regime saves more.
Quick check: Add up your deductions. Standard deduction (₹50K) + PF employee (₹21,600 for ₹15K basic) + 80C max (₹1.5L) = ₹2.22L without any optional deductions. If you also have HRA (₹1.5L+) or home loan interest (₹2L), you cross the break-even easily.
Which Regime is Right for You — Decision Tree
- Salary ≤ ₹12.75L gross → New regime. Zero tax either way, but new regime is simpler.
- Salary ₹12.75L–₹20L, no home loan, no HRA → New regime (likely lower tax).
- Salary ₹12.75L–₹20L, paying high rent or have home loan → Calculate both. Old regime likely wins.
- Salary above ₹20L → Almost certainly old regime wins if you have a home loan, HRA, and full 80C investments.
- Self-employed → New regime at flat 30% with no deductions vs old regime with business expenses — depends heavily on your deductible expenses.
Use the Income Tax Calculator to enter your exact salary and deductions — it computes both regimes simultaneously and shows you the saving.
Important: Once you opt for the old regime and are a salaried employee, you can switch back to new regime next year. But if you have business income, switching back is not straightforward. Salaried employees can freely switch every year — choose whichever saves more after calculating deductions.
Use These Calculators
Sources: Income Tax Dept of India, Reserve Bank of India, AMFI India, SEBI. All content is for educational purposes only — not financial advice. Last updated: 18 May 2025.