Old or new tax regime: which saves more?

The new regime is the default for Tax Year 2026-27 (FY 2026-27)

For Tax Year 2026-27 (FY 2026-27, assessed in the old system as AY 2027-28) the new regime has wider slabs and a lower rate at most incomes, and it is the regime that applies unless you opt out. Budget 2026 did not change the slabs. A resident individual's tax under it is nil up to ₹12 lakh of taxable income, because of the section 87A rebate. For a salaried person the standard deduction is ₹75,000, so gross salary up to ₹12.75 lakh can still fall inside that nil band. Just above ₹12 lakh, marginal relief stops the tax from jumping by more than the extra income.

The new regime does not allow 80C, 80D, HRA, or home-loan interest on a self-occupied house. Employer NPS under 80CCD(2) is allowed in both regimes.

The old regime pays you for deductions

The old slabs start taxing earlier: nil only up to ₹2.5 lakh (₹3 lakh from age 60, ₹5 lakh from age 80), then 5%, 20% and 30%. The standard deduction is ₹50,000. On top of that you can claim 80C up to ₹1.5 lakh, 80D medical insurance, HRA, home-loan interest up to ₹2 lakh under section 24(b), and an extra ₹50,000 of NPS under 80CCD(1B). The 87A rebate in the old regime stops at ₹5 lakh of taxable income.

A rough line, then your own numbers

If the deductions you can actually claim, including the ₹50,000 standard deduction, are only a lakh or two, the new regime is usually cheaper. Around ₹3.75–4 lakh of old-regime deductions, the old regime starts to win for many mid and higher salaries. That line moves with income, age and HRA, so it is a hint, not a rule.

Salaried people with no business income can choose again each year when they file. The calculator compares both regimes from the same gross income. It does not handle capital gains or other special-rate income, and it is not a filing tool.