Old vs New Tax Regime Calculator

The old regime has higher tax rates but lets you reduce your taxable income with dozens of exemptions and deductions — HRA, 80C investments, home-loan interest, health insurance and more. The new regime, which is the default from FY 2023-24 onwards, has lower slab rates and a higher basic exemption but removes almost all of those deductions. Whether you save more under one or the other depends entirely on how many deductions you actually claim.

There is no universal answer — it depends on your income and deductions. As a rough guide, if your total deductions are small (below roughly ₹2–3 lakh) the new regime usually wins because of its lower rates and the ₹12 lakh rebate. If you claim large HRA, full 80C, NPS and home-loan interest, the old regime can still come out ahead. This calculator works out both and tells you the exact difference for your numbers.

Nil up to ₹4 lakh, 5% on ₹4–8 lakh, 10% on ₹8–12 lakh, 15% on ₹12–16 lakh, 20% on ₹16–20 lakh, 25% on ₹20–24 lakh and 30% above ₹24 lakh. A standard deduction of ₹75,000 applies to salary income, and a Section 87A rebate makes taxable income up to ₹12 lakh entirely tax-free.

For taxpayers below 60: nil up to ₹2.5 lakh, 5% on ₹2.5–5 lakh, 20% on ₹5–10 lakh and 30% above ₹10 lakh. The basic exemption rises to ₹3 lakh for senior citizens (60–80) and ₹5 lakh for super-senior citizens (above 80). The standard deduction is ₹50,000.

The new regime gives a Section 87A rebate of up to ₹60,000 when your taxable income is ₹12 lakh or less, which cancels out the tax entirely. For a salaried person the ₹75,000 standard deduction sits on top, so a salary of up to ₹12.75 lakh can end up with zero tax. Note the rebate applies to taxable income after deductions, not to gross salary.

Without it, earning just ₹1 over ₹12 lakh would suddenly cost about ₹61,500 in tax — a harsh cliff. Marginal relief prevents this: for income just above ₹12 lakh, your tax is capped at the amount by which your income exceeds ₹12 lakh. So at ₹12,10,000 you pay roughly ₹10,000 (plus cess), not ₹61,500. The relief tapers off around ₹12.7 lakh, after which the normal slab tax is lower anyway.

No. The House Rent Allowance exemption under Section 10(13A) is only available in the old regime. Under the new regime your HRA is fully taxable as salary. If you pay significant rent, that lost HRA exemption is often the single biggest reason the old regime still wins for you.

Very few: the ₹75,000 standard deduction on salary, the employer’s NPS contribution under Section 80CCD(2) (up to 14% of basic), the Section 80CCH deduction for Agniveers, the deduction for family pension, and interest on a let-out property. Popular deductions like 80C, 80D, 80CCD(1B), HRA and self-occupied home-loan interest are not available.

The exempt HRA is the least of three figures: the actual HRA received; 50% of your basic salary if you live in a metro city (40% for non-metros); and the rent you paid minus 10% of your basic salary. Only the lowest of these three is exempt — the rest of your HRA is taxable. This calculator works it out automatically when you fill in the HRA section.

Surcharge is an extra levy on the tax (not the income) for high earners. It kicks in at 10% above ₹50 lakh of income, 15% above ₹1 crore and 25% above ₹2 crore. The old regime adds a 37% band above ₹5 crore, but the new regime caps surcharge at 25%, which makes it noticeably cheaper for very high incomes. Marginal relief also applies just above each threshold.

A 4% Health and Education Cess is added on top of your income tax plus any surcharge, in both regimes. It funds health and education programmes and is not optional. All the totals shown by this calculator already include it.

No, but it is the default. If you do nothing, your tax is computed under the new regime. To use the old regime you must actively opt for it — salaried taxpayers can switch each year, while those with business income face tighter rules on switching back. You can always model both here before deciding.

Often, yes. Senior citizens get a higher basic exemption (₹3 lakh, or ₹5 lakh for super-seniors) in the old regime, plus the larger 80TTB deduction of ₹50,000 on interest income and higher 80D limits for health insurance. If a retiree has meaningful interest income and medical premiums, the old regime can be more favourable — but it still pays to check both.

Start with gross salary and add other income (interest, rent, etc.). Subtract the exemptions you are entitled to (standard deduction, and in the old regime HRA, LTA and so on) to get income from salary. Add income from house property and other heads to reach gross total income. Then subtract Chapter VI-A deductions (80C, 80D, etc., old regime only) to arrive at taxable income, which is what the slabs are applied to.

Not yet in detail. This version focuses on salary, interest and house-property income, which covers the vast majority of salaried taxpayers. Capital gains are taxed at special rates and are kept out of the slab comparison for now. The tool is built so that capital-gains support can be added later without changing the core engine.

Section 80CCD(2) is the deduction for your employer’s contribution to your NPS account. It is one of the rare deductions allowed in the new regime as well as the old. The cap is 14% of your basic salary in the new regime (and for government employees), or 10% for non-government employees in the old regime. Because it survives in both, structuring part of your salary as employer NPS can cut tax under either regime.

In the old regime you can deduct up to ₹2 lakh of interest on a self-occupied home loan under Section 24(b), and the principal counts towards 80C. In the new regime, self-occupied interest gives no deduction at all; only interest on a let-out property remains deductible against the rent. This calculator applies each rule correctly per regime.

The slab logic, rebate, marginal relief, surcharge and cess have been verified against the published FY 2025-26 figures and the official Budget illustrations. That said, individual tax situations can be complex — special incomes, clubbing, set-off rules and exemptions we have simplified can change the outcome. Treat the result as a reliable estimate, not a filed computation.

This version assumes salaried or simple income. Agricultural income is exempt but is used for rate-setting (partial integration) under specific conditions, and business income brings its own rules on regime switching and presumptive taxation. Those are out of scope here; if they apply to you, consult a tax professional.

Salaried individuals and pensioners with no business income can choose afresh between the old and new regime every financial year when filing their return. People with business or professional income can opt out of the new regime only once, and switching back is restricted. Modelling both regimes annually — as you can here — is therefore especially useful for salaried taxpayers.

Yes, but at different amounts. The standard deduction on salary or pension income is ₹50,000 in the old regime and ₹75,000 in the new regime for FY 2025-26. It is applied automatically and needs no proof or investment, which is why the new regime’s larger figure is one of its quiet advantages.