Old Regime vs New Regime
Detailed comparison with breakeven analysis for FY 2025-26
New Regime (Default)
| ₹0 – ₹4,00,000 | 0% |
| ₹4,00,000 – ₹8,00,000 | 5% |
| ₹8,00,000 – ₹12,00,000 | 10% |
| ₹12,00,000 – ₹16,00,000 | 15% |
| ₹16,00,000 – ₹20,00,000 | 20% |
| ₹20,00,000 – ₹24,00,000 | 25% |
| ₹24,00,000+ | 30% |
- Standard Deduction: ₹75,000
- Section 87A rebate up to ₹12,00,000 taxable income
- No other deductions allowed
- Simpler filing, fewer documents
- Default regime from FY 2023-24
Old Regime (Optional)
| ₹0 – ₹2,50,000 | 0% |
| ₹2,50,000 – ₹5,00,000 | 5% |
| ₹5,00,000 – ₹10,00,000 | 20% |
| ₹10,00,000+ | 30% |
- Standard Deduction: ₹50,000
- Section 87A rebate: up to ₹12,500 if income ≤ ₹5L
- All deductions available (80C, 80D, HRA, etc.)
- Better if you have substantial deductions
- Must opt in (file Form 10-IE for business income)
Breakeven Analysis — How Much Deduction Makes Old Regime Better?
The table below shows the minimum total deductions (beyond standard deduction) needed under the Old Regime to pay less tax than the New Regime.
| Annual Income | New Regime Tax | Breakeven Deductions | Verdict |
|---|---|---|---|
| ₹5,00,000 | ₹0 | ₹0 | Old Regime likely better |
| ₹7,50,000 | ₹0 | ₹2,00,000 | Depends on your deductions |
| ₹10,00,000 | ₹0 | ₹4,50,000 | Depends on your deductions |
| ₹12,00,000 | ₹0 | ₹6,50,000 | New Regime likely better |
| ₹15,00,000 | ₹97,500 | ₹5,43,748 | New Regime likely better |
| ₹20,00,000 | ₹1,92,400 | ₹7,08,332 | New Regime likely better |
| ₹25,00,000 | ₹3,19,800 | ₹7,99,999 | New Regime likely better |
| ₹30,00,000 | ₹4,75,800 | ₹7,99,999 | New Regime likely better |
| ₹50,00,000 | ₹10,99,800 | ₹7,99,999 | New Regime likely better |
When to Choose New Regime
- You have minimal investments / deductions
- Income is below ₹12 lakh (effectively zero tax)
- You prefer simple tax filing
- You live in own house (no HRA benefit)
- No home loan or education loan
When to Choose Old Regime
- 80C investments maxed (₹1.5 lakh)
- Claiming HRA (especially in metros)
- Home loan interest deduction (₹2 lakh)
- High health insurance premium (80D)
- NPS contribution for extra ₹50,000