The new regime is now the default — but the old regime can still save you more if you claim big deductions. Here’s how to choose.
Quick answer: The new regime (default) has lower slab rates and makes income up to ₹12 lakh effectively tax-free via the enhanced rebate — best if you have few deductions. The old regime is usually better if your deductions (HRA, home-loan interest, 80C, 80D) are large, roughly above ₹5–7 lakh. The only way to be sure is to compute both.
| Feature | New Regime (default)Fewer deductions | Old Regime |
|---|---|---|
| Basic exemption | ₹4,00,000 | ₹2,50,000 |
| Rebate u/s 87A (tax-free up to) | ₹12,00,000 income | ₹5,00,000 income |
| Standard deduction (salaried) | ₹75,000 | ₹50,000 |
| 80C / 80D / HRA / home-loan | Not allowed | Allowed |
| Max surcharge | 25% | 37% |
| Slab structure | Lower rates, more slabs | Higher rates, fewer slabs |
| Best for | Few / no deductions | Large deductions |
You have few deductions to claim (little 80C/HRA/home loan), want simpler filing, or your income is up to ~₹12–12.75 lakh — where the rebate makes it effectively tax-free.
You claim substantial deductions — HRA, home-loan interest, maxed-out 80C, medical insurance — typically adding up beyond ₹5–7 lakh, where the deductions outweigh the new regime’s lower rates.
Up to ₹4 lakh: Nil · ₹4–8 lakh: 5% · ₹8–12 lakh: 10% · ₹12–16 lakh: 15% · ₹16–20 lakh: 20% · ₹20–24 lakh: 25% · above ₹24 lakh: 30%. With the ₹75,000 standard deduction, a salaried person earning up to ₹12.75 lakh pays effectively zero tax.
Up to ₹2.5 lakh: Nil · ₹2.5–5 lakh: 5% · ₹5–10 lakh: 20% · above ₹10 lakh: 30% (higher basic exemption for senior citizens). The old regime’s advantage is the wide range of deductions — 80C (₹1.5 lakh), 80D, HRA, home-loan interest and more — which can substantially cut taxable income.
Don’t choose on slab rates alone — compare your total tax after all eligible deductions under both. If your deductions are small, the new regime almost always wins; if they’re large, the old regime often does. Our income-tax calculator computes both instantly, and a CA confirms the optimal choice when we file.
The new tax regime is the default from FY 2025-26. If you want the old regime, you must actively opt for it.
Under the new regime, the enhanced Section 87A rebate makes income up to ₹12 lakh effectively tax-free for residents (up to ₹12.75 lakh for salaried after standard deduction). NRIs cannot claim this rebate.
When your deductions — HRA, home-loan interest, 80C, 80D — are large, typically adding up beyond roughly ₹5–7 lakh, the old regime can save more.
Salaried individuals without business income can generally choose afresh each year at filing. Those with business income face restrictions on switching back. We advise on your case.
We compute both and file whichever legitimately cuts your tax.
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