Since FY 2023-24, every salaried Indian must choose between two tax regimes every year — and the wrong choice silently costs thousands. The new regime taxes at lower slab rates but strips away almost all deductions (80C, 80D, HRA and the rest); the old regime keeps every deduction but taxes at higher rates. Which wins depends entirely on your salary and how much you actually claim in deductions. This income tax calculator for FY 2025-26 (AY 2026-27) computes your liability under both regimes side by side — including standard deduction, rebate under 87A, surcharge and 4% health & education cess — and declares a clear winner with the exact rupee difference.
How the comparison works
Enter gross salary, then the deductions you actually claim (80C investments, 80D insurance, HRA exemption, NPS, home loan interest). The calculator applies FY 2025-26 slabs to each regime: the new regime is now the default and offers zero tax up to ₹12 lakh of income under the revised rebate.
Example
₹15,00,000 salary, ₹2,50,000 in deductions (80C + 80D + HRA). Old regime tax ≈ ₹1,71,600. New regime tax ≈ ₹1,45,600. New regime wins by ₹26,000. With ₹4,00,000 in deductions, the old regime typically pulls ahead.
The two regimes
New regime (default): lower rates, standard deduction ₹75,000, rebate making income up to ₹12 lakh tax-free, almost no other deductions. Old regime: higher rates but full deductions — 80C (₹1.5L), 80D, HRA, 24(b) home loan interest, NPS. The crossover usually sits around ₹2–3 lakh of claimed deductions, varying with income.
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Frequently asked questions
Which is better, old or new tax regime?
It depends on your deductions. Roughly: if you claim under ~₹2–2.5 lakh in deductions, the new regime usually wins; above that, the old regime often wins. Enter your numbers above for an exact answer.
What is the rebate under 87A for FY 2025-26?
Under the new regime, resident individuals with taxable income up to ₹12 lakh pay zero tax after the rebate. The old regime rebate covers income up to ₹5 lakh.
Can I switch regimes every year?
Salaried individuals can choose each year when filing. Business income taxpayers face restrictions on switching back.
Is the standard deduction available in both regimes?
Yes — ₹50,000 in the old regime and ₹75,000 in the new regime for salaried taxpayers.