Old vs New Tax Regime FY 2026-27
Which income tax regime saves you more money? A slab-by-slab breakdown with real examples and a breakeven calculator.
Last updated: September 2026 · Source: Finance Act 2025, Income Tax Department
Quick verdict for FY 2026-27
The new regime wins for most salaried Indians - especially those with income up to ₹12 lakh (zero tax via 87A rebate) or those without large deductions. The old regime only wins if your total deductions exceed the breakeven amount for your income level.
What changed in FY 2025-26 (Budget 2025)
Budget 2025 made the new regime even more attractive: the 87A rebate was raised to ₹60,000 (making income up to ₹12 lakh effectively tax-free), new slabs were restructured with lower rates, and the standard deduction was retained at ₹75,000. These changes apply from FY 2025-26 onwards.
Tax slabs: FY 2026-27
New Regime (Default)
Standard deduction: ₹75,000 · 87A rebate: up to ₹60,000
| Up to ₹4 lakh | Nil |
| ₹4 lakh - ₹8 lakh | 5% |
| ₹8 lakh - ₹12 lakh | 10% |
| ₹12 lakh - ₹16 lakh | 15% |
| ₹16 lakh - ₹20 lakh | 20% |
| ₹20 lakh - ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
Old Regime (Opt-in)
Standard deduction: ₹50,000 · 87A rebate: up to ₹12,500
| Up to ₹2.5 lakh | Nil |
| ₹2.5 lakh - ₹5 lakh | 5% |
| ₹5 lakh - ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
Real examples by income level
| Gross Income | New Regime Tax | Old Regime Tax | Winner |
|---|---|---|---|
| ₹8 lakh | ₹0 | ₹0* | New |
| ₹12 lakh | ₹0 | ₹52,500 (after ₹1.5L 80C + ₹50K std dedn) | New |
| ₹15 lakh | ₹1,05,000 | ₹1,05,000 (with ~₹4.25L deductions) | Tie |
| ₹20 lakh | ₹2,10,000 | ₹2,10,000 (with ~₹5.75L deductions) | Tie |
| ₹30 lakh | ₹4,60,000 | ₹4,60,000 (with ~₹8L deductions) | Tie |
* Old regime examples assume standard deductions only unless stated. Surcharge and cess not included. All figures approximate.
Deductions that make old regime win
The old regime wins only if you claim enough deductions to bring your taxable income down significantly. Here are the main ones:
Section 80C
Up to ₹1,50,000PPF, ELSS, life insurance, EPF, home loan principal, NPS
Standard Deduction
₹50,000 (salaried)Automatic for salaried and pensioners - no proof needed
Section 80D (Health)
₹25,000-₹1,00,000Health insurance premium for self, spouse, children, parents
HRA Exemption
Actual rent minus 10% of salaryFor employees who pay rent and get HRA from employer
Home Loan Interest (24b)
Up to ₹2,00,000Interest on self-occupied home loan
NPS Employer (80CCD2)
Up to 14% of basic salaryAvailable in new regime too - big advantage if employer contributes
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Tax figures are approximate and based on Finance Act 2025. Consult a Chartered Accountant for your specific situation. See our disclaimer.