Tax Regime Comparator
Key Takeaway
The New Tax Regime FY 2025-26 offers a ₹75,000 standard deduction and tax rebate up to ₹12 lakh income. The Old Regime is better if your deductions (80C+HRA+80D+NPS) exceed ₹3.5–₹4 lakh annually.
Income & Deductions Details
Old Regime Tax Exemptions
Save with the New Tax Regime
You save approximately ₹1,01,400 by opting for the New regime.
Regime Comparison
9,25,000
1,01,400
11,25,000
0
Important Note on Slabs
The calculation accounts for standard deductions of ₹75,000 for New Regime and ₹50,000 for Old Regime, alongside 87A rebate rules. Always cross-verify configurations with your tax advisor.
What to do next
Based on your Tax Regime Comparator, here are the tools you should try next:
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Navigating the Indian Tax Labyrinth
Taxes are the biggest expense of your working life. Understanding the difference between the Old Tax Regime (which rewards you for investing in specific instruments like PPF, ELSS, and Home Loans) and the New Tax Regime (which offers lower slab rates but strips away almost all deductions) is crucial. A wrong choice here can cost you over a lakh of rupees a year.
Old vs. New Regime: Neha's Dilemma
**Scenario A: The New Regime (The default option)**
Under the new regime, Neha gets a standard deduction of ₹50,000. Her taxable income becomes ₹11,50,000. With the revised slabs, her total tax liability comes out to exactly **₹93,600**. It's simple, requires zero paperwork, and she gets more cash in hand every month.
**Scenario B: The Old Regime (The optimizer's choice)**
Neha is disciplined. She already invests ₹1.5 Lakhs in ELSS and PPF (Section 80C), pays ₹25,000 for health insurance (Section 80D), and pays a high rent in Bengaluru, allowing her to claim an HRA exemption of ₹1.5 Lakhs.
Her deductions: ₹50k (Standard) + ₹1.5L (80C) + ₹25k (80D) + ₹1.5L (HRA) = ₹3.75 Lakhs.
Her taxable income drops to ₹8,25,000. Her tax liability under the old slabs comes down to just **₹70,200**.
By doing a bit of planning and choosing the Old Regime, Neha saved **₹23,400** in a single year,money she can now use to fund a domestic vacation! However, if Neha wasn't paying rent or investing in 80C, the New Regime would have been far cheaper for her.
Old Regime vs New Regime: The Answer Isn't as Obvious as You Think
Every March, millions of Indian salaried employees choose between the Old and New Tax Regimes , and a surprising number get it wrong. Not because they're careless, but because the answer genuinely depends on deductions that vary enormously from person to person.
The New Regime offers lower slab rates but removes most deductions. The Old Regime has higher slabs but allows HRA, 80C, 80D, home loan interest, NPS contributions, and much more. Whether the Old Regime wins depends entirely on your actual deduction total.
A general rule: if your annual deductions (80C + HRA + 80D + home loan interest + NPS) exceed ₹3.5–4 lakhs, the Old Regime typically saves you more tax. Below that threshold, the New Regime usually wins. But "typically" and "usually" are doing a lot of work in those sentences , always run the actual numbers.
FY 2025-26 update: The New Regime now has a ₹75,000 standard deduction for salaried employees and the tax-free income threshold under New Regime is ₹12 lakhs (after rebate). This has tilted the balance toward New Regime for more taxpayers than before. Use this calculator to find out exactly where you stand.
Frequently Asked Questions
Which tax regime should I choose , Old or New?
If you have significant deductions (HRA, 80C, 80D, home loan interest totaling ₹4-5 Lakhs+), the Old Regime may save you more. If your deductions are minimal, the New Regime with its lower slab rates and ₹75,000 standard deduction is usually better.
What is the standard deduction in the New Tax Regime?
From FY 2024-25, the New Tax Regime offers a standard deduction of ₹75,000 for salaried individuals. This is automatically applied and reduces your taxable income.
Are EPF contributions tax-free?
Employee EPF contributions up to ₹1.5 Lakh qualify for 80C deduction under the Old Regime. In the New Regime, your own EPF contribution is NOT deductible, but the employer's contribution (up to ₹7.5 Lakh total across EPF/NPS/superannuation) is exempt.
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