Which Tax Regime Is Better for Me?
There's no single right answer — it depends on your income, your deductions, and how you earn. Here's a fast way to find your own case, backed by the actual worked numbers behind each one.
Old vs New Tax Regime Calculator
Skip the rules of thumb — enter your own numbers directly.
The short answer
For most salaried people with few old-regime deductions, the new regime wins, often by a wide margin. It usually still wins even with a home loan and maxed-out 80C — just by less. The clearest exceptions are freelancers (different rules entirely) and, to a lesser extent, senior citizens (higher old-regime exemption limits this calculator doesn't yet model).
Find your situation
| Your situation | Usual answer | Read more |
|---|---|---|
| Salaried, income below ₹12.75L, few deductions | New regime — effectively ₹0 tax | Standard deduction explained |
| Salaried, income above ₹12.75L, few deductions | New regime — clearly cheaper | Above ₹12 lakh, worked out |
| Home loan + maxed 80C + 80D | Usually still new regime, but check | With a home loan, worked out |
| Freelancer / consultant / business income | Usually new regime, but no standard deduction either way | For freelancers, worked out |
| Senior citizen (60+) or super senior (80+) | Check both — not fully modelled here | See note below |
Why the new regime wins for most people
Three things stack in its favour at once: a bigger standard deduction (₹75,000 vs ₹50,000), a rebate that covers tax up to ₹12,00,000 taxable income (vs ₹5,00,000 in the old regime) with marginal relief softening the edge, and lower rates in every bracket below 30% (which itself doesn't start until ₹24,00,000, vs ₹10,00,000 in the old regime). For someone with no home loan, minimal 80C, and no HRA to claim, there's usually no contest.
When it's actually worth comparing
- You have a home loan on a self-occupied property. The ₹2,00,000 interest deduction is old-regime-only and meaningful — but our numbers show it usually isn't enough on its own. See the home loan comparison.
- You claim significant HRA exemption. HRA is old-regime-only and can be substantial in expensive cities — work out the exact figure with the HRA Exemption Calculator (it now includes the 2026 metro-city expansion), then plug the result into the "HRA exemption already worked out" field above.
- You have freelance or business income. No standard deduction in either regime changes the baseline entirely — see the freelancer comparison, including the one-time switch-back restriction that doesn't apply to salaried filers.
- You're a senior or super senior citizen. See the note below.
A note for senior citizens
The old regime gives senior citizens (60–79) a basic exemption of ₹3,00,000 and super senior citizens (80+) ₹5,00,000 — both higher than the general ₹2,50,000 threshold. The new regime uses a single flat ₹4,00,000 threshold regardless of age. This calculator currently uses the general (non-senior) old-regime slabs, so if you're a senior citizen comparing the old regime, your actual old-regime tax will be somewhat lower than what this tool shows — worth factoring in, or checking with a professional, before deciding.
The one rule that overrides all of this
If you have business or professional income, switching from the old regime back to the new regime is a one-time move — after that, you're locked into the new regime for good. Salaried filers without business income face no such restriction. Read the mechanics in the freelancers post before you decide, if this applies to you.
FAQ
For most salaried people with few old-regime deductions, yes — the new regime's lower slab rates, ₹75,000 standard deduction, and ₹12L rebate threshold make it the cheaper option in the large majority of cases we've checked, including scenarios with home loans and maxed-out 80C.
If you have a home loan on a self-occupied property, maxed-out 80C, meaningful HRA exemption, or heavy 80D claims — the gap narrows considerably, even if the new regime still tends to win under current slabs. Freelancers and business owners should also check specifically, since they don't get the standard deduction in either regime.
Not yet. The old regime gives senior citizens (60–79) a ₹3,00,000 basic exemption and super senior citizens (80+) ₹5,00,000, both higher than the general ₹2,50,000 — while the new regime uses a flat ₹4,00,000 for all ages. This calculator currently uses the general old-regime slabs; senior citizens should adjust for this or consult a professional for an exact figure.
If you're salaried with no business income, yes — you can pick either regime freely each year when filing your return. If you have business or professional income, switching from the old regime back to the new regime is allowed only once; after that you're locked into the new regime. See old vs new regime for freelancers for the detail.
Use the Old vs New Tax Regime Calculator directly — enter your gross income and, if relevant, your old-regime deductions (80C, 80D, HRA, home loan interest, NPS). It shows both regimes' tax side by side and which one is cheaper for your numbers specifically.
Last verified: 12 Aug 2026
Source: incometax.gov.in — "Salaried Individuals for AY 2026-27" (https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1). Not the site's general "New Tax vs Old Tax Regime FAQs" page, which is stale.
This is an indicative estimate for FY 2025-26 (AY 2026-27) that summarises the other posts in this series. It does not account for every deduction, income type, or age-based exemption. Confirm your exact liability with a qualified tax professional before filing or making financial decisions.