Old vs New Tax Regime Calculator India
Compare your income tax liability under India's Old Tax Regime and New Tax Regime for FY 2025-26 (AY 2026-27). Enter your income and deductions to instantly see which regime saves you more money, the breakeven deduction amount, and a full slab-wise breakdown with 4% health and education cess.
How the Old vs New Tax Regime Calculator Works
The Old vs New Tax Regime Calculator is a free, browser-based tool that compares your income tax under both Indian tax regimes for FY 2025-26 (AY 2026-27). It uses the latest slab rates announced in Union Budget 2025 to compute your exact tax liability, including Section 87A rebate and 4% health and education cess. Enter your gross annual income, Section 80C investments (PPF, ELSS, LIC), health insurance premiums under 80D, HRA exemption, and any other deductions. The calculator instantly shows tax under both regimes side by side, highlights which one saves more, and calculates the breakeven deduction amount where both regimes produce equal tax.
New Tax Regime Slabs for FY 2025-26
The New Tax Regime, which became the default from FY 2023-24, received revised slab rates in Budget 2025. For FY 2025-26, income up to 4 lakh is tax-free, followed by 5% on 4-8 lakh, 10% on 8-12 lakh, 15% on 12-16 lakh, 20% on 16-20 lakh, 25% on 20-24 lakh, and 30% above 24 lakh. A standard deduction of 75,000 rupees is available. The Section 87A rebate makes income up to 12 lakh rupees (taxable) effectively tax-free under this regime, meaning salaried individuals earning up to 12.75 lakh pay zero tax. The new regime does not allow deductions under 80C, 80D, HRA exemption, or most other sections, making it simpler but potentially costlier for those with high deductions.
Old Tax Regime Slabs and Deductions
The Old Tax Regime retains three main slab rates: nil up to 2.5 lakh, 5% on 2.5-5 lakh, 20% on 5-10 lakh, and 30% above 10 lakh. Its major advantage is the ability to claim deductions. Section 80C allows up to 1.5 lakh for investments in PPF, ELSS, LIC premiums, EPF contributions, and tuition fees. Section 80D covers health insurance premiums up to 25,000 (or 50,000 for senior citizens). HRA exemption can save significant tax for employees paying rent in metro cities. Other deductions include 80E for education loan interest, 80G for donations, 80TTA for savings account interest, and Section 24(b) for home loan interest up to 2 lakh. The standard deduction under the old regime is 50,000 rupees. Based on Income Tax Department guidelines for AY 2026-27, taxpayers with total deductions exceeding approximately 4-5 lakh may benefit more from the old regime.
When to Choose Old Regime Over New Regime
The decision depends on your total eligible deductions. If your combined deductions (80C + 80D + HRA + home loan interest + NPS + others) are substantial, the old regime may result in lower tax despite higher slab rates. For incomes between 10-15 lakh, a deduction threshold of roughly 3.75-4.5 lakh typically makes the old regime better. For higher incomes above 20 lakh, the breakeven deduction is higher because the new regime's lower rates on the first 24 lakh create a bigger gap. This calculator computes the exact breakeven amount for your specific income, removing all guesswork. Salaried employees can switch between regimes each financial year, so running this comparison annually before your employer's tax declaration deadline ensures you always pick the optimal option.
Frequently Asked Questions
What are the new tax regime slabs for FY 2025-26?
Under the New Tax Regime for FY 2025-26 (AY 2026-27), income up to \u20B94,00,000 is tax-free, \u20B94,00,001 to \u20B98,00,000 is taxed at 5%, \u20B98,00,001 to \u20B912,00,000 at 10%, \u20B912,00,001 to \u20B916,00,000 at 15%, \u20B916,00,001 to \u20B920,00,000 at 20%, \u20B920,00,001 to \u20B924,00,000 at 25%, and above \u20B924,00,000 at 30%. A standard deduction of \u20B975,000 is available, and the Section 87A rebate makes income up to \u20B912,00,000 (taxable) effectively tax-free.
What deductions are allowed under the old tax regime?
The Old Tax Regime allows deductions under Section 80C (up to \u20B91,50,000 for PPF, ELSS, LIC, EPF, NSC, tuition fees), Section 80D (health insurance up to \u20B925,000 for self and \u20B950,000 for senior citizen parents), HRA exemption for salaried employees paying rent, Section 80E for education loan interest, Section 80G for donations, Section 24(b) for home loan interest up to \u20B92,00,000, and NPS contributions under 80CCD(1B) up to \u20B950,000. A standard deduction of \u20B950,000 also applies.
Can salaried employees switch between old and new regime every year?
Yes, salaried employees without business or professional income can switch between the old and new tax regime every financial year. You declare your choice to your employer for TDS purposes and finalize it when filing your ITR. However, individuals with business income can switch from new to old regime only once in their lifetime. Once they revert to old, they cannot return to the new regime again.
What is the breakeven deduction amount?
The breakeven deduction amount is the total deduction level at which the Old Tax Regime produces the same tax as the New Tax Regime. If your actual deductions (80C + 80D + HRA + others) exceed this breakeven point, the Old Regime saves you more. If your deductions are below this amount, the New Regime is better. This calculator computes the exact breakeven for your specific income level.
How is the Section 87A rebate applied in FY 2025-26?
Under the New Regime, if your taxable income (after \u20B975,000 standard deduction) is \u20B912,00,000 or less, the Section 87A rebate eliminates your entire tax liability, making it zero. This means salaried individuals earning up to \u20B912,75,000 pay no tax under the new regime. Under the Old Regime, the 87A rebate of up to \u20B912,500 applies if taxable income is \u20B95,00,000 or less.
Does this calculator include health and education cess?
Yes, the calculator adds 4% health and education cess on the computed tax amount for both regimes. For example, if your tax before cess is \u20B91,00,000, the cess adds \u20B94,000, making total tax \u20B91,04,000. The cess applies equally under both old and new tax regimes and is mandated by the Income Tax Department for FY 2025-26.
Is the new tax regime the default for FY 2025-26?
Yes, the New Tax Regime has been the default since FY 2023-24. If you do not explicitly opt for the Old Regime when filing your return, the new regime applies automatically. Salaried employees should inform their employer early in the financial year about their regime choice so that TDS is deducted correctly. You can finalize your choice when filing your ITR before the due date.