Which Income Tax Regime is Better in India?
Every year, the Indian salaried class faces the same dilemma: stick with the Old Tax Regime and claim deductions, or switch to the New Tax Regime for lower slab rates but zero investment exemptions.
The Breakeven Point Strategy
If you do NOT have any home loan interest (Section 24b) or pay heavy rent (HRA Exemption), the New Tax Regime is almost always better. The new structure offers a massive ₹75,000 standard deduction and complete tax rebate up to a Total Taxable Income of ₹7,000,000.
When Does the Old Regime Win?
The Old Regime begins to significantly outperform the New Regime only if your gross salary exceeds ₹15 Lakhs AND you are maximizing almost every deduction possible:
- ₹1.5 Lakhs in Section 80C (PPF, ELSS, EPF).
- ₹50,000 in NPS (Section 80CCD(1B)).
- ₹25,000 to ₹50,000 in Health Insurance (Section 80D).
- ₹2,000,000+ in Home Loan Interest.
Use our free Tax Comparison Calculator to run your exact numbers before declaring your regime format to your employer's HR payroll system.