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Every March, millions of salaried Indians ask the same question: "Should I switch to the new tax regime or stay in the old one?" Here's the complete, no-jargon comparison — with slabs, examples, and a free calculator.
The Simple Rule
Choose New Regime if...
Your total deductions (80C + HRA + home loan) are less than ₹3.75 lakh
Choose Old Regime if...
Your total deductions are more than ₹3.75 lakh (home loan + HRA + 80C fully claimed)
| Income | Rate |
|---|---|
| Up to ₹3 lakh | Nil |
| ₹3L – ₹7L | 5% |
| ₹7L – ₹10L | 10% |
| ₹10L – ₹12L | 15% |
| ₹12L – ₹15L | 20% |
| Above ₹15L | 30% |
+ ₹75,000 standard deduction. Income up to ₹12L = Zero tax (with rebate).
| Income | Rate |
|---|---|
| Up to ₹2.5 lakh | Nil |
| ₹2.5L – ₹5L | 5% |
| ₹5L – ₹10L | 20% |
| Above ₹10L | 30% |
+ ₹50,000 standard deduction + all 80C/HRA/home loan deductions.
Stop Guessing — Calculate Your Exact Tax
Enter your salary, HRA, 80C investments, and home loan details to see which regime saves you more rupees.
Open Tax Regime CalculatorIs ₹12 lakh income really tax-free in 2025-26?
Yes, under the New Regime. With a ₹75,000 standard deduction, your taxable income becomes ₹11.25 lakh. The Section 87A rebate applies up to ₹12 lakh taxable income, making effective tax zero. So anyone earning up to ₹12.75 lakh gross pays zero income tax under the new regime.
Can I switch between regimes every year?
Salaried employees (without business income) can switch between New and Old regime every year while filing their ITR. Employees with business income can only switch once. You can also inform your employer mid-year to change TDS deduction.
Is 80C investment still worth it in the new regime?
No — 80C deductions (LIC, PPF, ELSS, EPF, etc.) are not allowed under the New Tax Regime. However, if you are in the Old Regime, claiming ₹1.5 lakh 80C can save you up to ₹45,000 in taxes at the 30% slab.
What happens if I do not declare my regime choice?
If you don't declare a preference, your employer defaults you to the New Tax Regime (which has been the default since FY 2023-24). You can change this while filing your ITR.
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