New vs Old Tax Regime Comparison
Run a detailed side-by-side comparison of your tax liabilities under the Old and New tax regimes for FY 2025-26.
Your total annual salary plus other taxable income.
Old Regime Deductions
These tax deductions only apply to reduce taxable income under the Old Tax Regime. They are ignored under the New Regime.
EPF, PPF, ELSS, Insurance premium, school fees (Max ₹1.5L).
Health insurance premium paid for self and family.
House Rent Allowance (HRA) exemption.
Interest portion of home loan EMI paid.
Verdict
Choose the New Regime.It saves you ₹74,100 in taxes!
| Tax Parameters | New Regime (FY 25-26) | Old Regime |
|---|---|---|
| Gross Income | ₹15,00,000 | ₹15,00,000 |
| Standard Deduction | - ₹75,000 | - ₹50,000 |
| Exemptions & Deductions | - ₹0 | - ₹2,75,000 |
| Net Taxable Income | ₹14,25,000 | ₹11,75,000 |
| Tax Before Rebate | ₹93,750 | ₹1,65,000 |
| Tax Rebate (Sec 87A) | - ₹0 | - ₹0 |
| Cess (4%) | ₹3,750 | ₹6,600 |
| Total Tax Payable | ₹97,500 | ₹1,71,600 |
Quick Rule of Thumb
If your total tax deductions under Section 80C, HRA, etc., are less than ₹3.75 Lakhs per year, the New Tax Regime is mathematically guaranteed to save you money for incomes below ₹15 Lakhs.Grow Your Business Online
Frequently Asked Questions
Why did the government introduce the New Tax Regime?
The New Tax Regime was introduced to simplify the Indian tax system by offering lower tax rates while eliminating most exemptions and deductions (like 80C, 80D, HRA). This reduces compliance burdens and leaves more disposable income directly in hand.
At what salary level is the New Regime better?
Generally, for FY 2025-26, the New Tax Regime is more beneficial for most salaried employees unless you have deductions exceeding ₹3.75 Lakhs to ₹4.25 Lakhs per year (such as home loan interest under Sec 24b and Section 80C).
Can I switch between Old and New regimes every year?
Salaried individuals without business income can choose their preferred tax regime (Old or New) every financial year at the time of filing their Income Tax Return (ITR).
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