Every year the same question comes up: should you file under the new tax regime or the old? For FY 2025-26 the answer matters more than ever, because the new regime became genuinely generous.
The new regime in FY 2025-26
Under the new regime, taxable income up to ₹12 lakh attracts zero tax thanks to the enhanced Section 87A rebate (up to ₹60,000). With the ₹75,000 standard deduction, a salaried person earning up to ₹12.75 lakh effectively pays nothing. Rates above that rise in clean ₹4-lakh bands.
The old regime
The old regime keeps the deductions many people rely on — 80C, 80D, HRA and home-loan interest — with a ₹50,000 standard deduction. Its rebate covers income only up to ₹5 lakh.
How to decide
- If you claim large deductions (home loan, big 80C, HRA), the old regime can still win.
- If you claim few or no deductions, the new regime is almost always better.
- The break-even depends on your exact deductions — so run your real numbers.
The easy way to check
Don't guess — calculate. Our free Income Tax Calculator compares both regimes side by side for your exact income and tells you which saves more. It takes 30 seconds and removes all the guesswork before you file.
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This article is for general information based on rules current at the time of writing and is not professional advice. Rules change — confirm specifics with a GovYapar expert before acting.
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