Since Budget 2020 introduced the new tax regime, salaried employees have faced a crucial annual decision: stick with the old regime or switch to the new one? With Budget 2025 making the new regime even more attractive, the answer now depends heavily on your deduction profile.

New Tax Regime Slabs (AY 2026-27)

  • Up to \u20b94,00,000: Nil
  • \u20b94,00,001 \u2013 \u20b98,00,000: 5%
  • \u20b98,00,001 \u2013 \u20b912,00,000: 10%
  • \u20b912,00,001 \u2013 \u20b916,00,000: 15%
  • \u20b916,00,001 \u2013 \u20b920,00,000: 20%
  • \u20b920,00,001 \u2013 \u20b924,00,000: 25%
  • Above \u20b924,00,000: 30%

Also: zero tax for income up to \u20b912 lakh via Section 87A rebate. Standard deduction of \u20b975,000.

Old Tax Regime Slabs

  • Up to \u20b92,50,000: Nil
  • \u20b92,50,001 \u2013 \u20b95,00,000: 5%
  • \u20b95,00,001 \u2013 \u20b910,00,000: 20%
  • Above \u20b910,00,000: 30%

Who Benefits From Old Regime?

  • You claim HRA (especially in metro cities with high rent)
  • You have a large home loan with interest deduction exceeding \u20b92 lakh
  • Your Section 80C investments + NPS total close to \u20b92 lakh
  • Your total deductions exceed \u20b93.75 lakh

Who Benefits From New Regime?

  • Income up to \u20b912 lakh (zero tax via 87A rebate)
  • Minimal HRA or own house
  • Low investments and no home loan
  • Income above \u20b924 lakh (simplified compliance)

The break-even point varies by salary. Use the SaveTaxNow Calculator to get your personal old vs new regime comparison in under 2 minutes.