Old vs New Tax Regime Calculator

⚡ In shortWhich tax regime is cheaper for you? Enter your salary and your actual deductions — HRA, home-loan interest, 80C/80D and NPS — and this tool compares the old and new regimes for AY 2026-27 and shows the exact saving.

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How it is calculated

The new regime has a ₹75,000 standard deduction and makes income up to ₹12 lakh effectively tax-free via the section 87A rebate, but disallows most deductions. The old regime has a ₹50,000 standard deduction and lets you claim HRA exemption, home-loan interest under section 24(b) (up to ₹2 lakh), 80C (up to ₹1.5 lakh), 80D and the NPS 80CCD(1B) deduction (up to ₹50,000). This tool folds in all of those, computes the tax under both regimes (including 4% cess), and tells you which one is cheaper and by how much — so the more deductions you genuinely claim, the more likely the old regime wins.

Inaction is a decision, because the new regime is the default

If you make no election, tax is computed under the new regime. Salaried taxpayers can choose again each year at filing. Those with business or professional income must file Form 10-IEA to opt for the old regime, and they cannot switch back and forth at will. Because payroll applies whatever you declared in April, a late change of mind produces a large refund or demand rather than an even year.

The comparison is deductions against rates

The old regime offers HRA, LTA, 80C, 80D and interest on a self-occupied house, at higher rates. The new regime offers lower rates with a ₹75,000 standard deduction for salaried taxpayers and the employer's NPS contribution under section 80CCD(2). Broadly, the more you can genuinely evidence in deductions, the better the old regime looks. Large rent with HRA and a home loan are what usually tip it.

Understand the ₹12 lakh figure correctly

Nil tax up to ₹12 lakh in the new regime results from the section 87A rebate, not from the slabs. That has two consequences worth knowing. The rebate is available only to resident individuals — not to non-residents and not to HUFs. And it does not extend to income taxed at special rates, so someone under ₹12 lakh in total income can still owe tax after selling listed shares.

Deductions must be real to count

The arithmetic only holds if the deductions you enter are ones you can actually evidence: rent genuinely paid with a landlord's PAN where required, investments actually made, premiums actually paid by a traceable mode. A comparison run on aspirational figures will recommend the old regime and then leave you short when proofs are collected in January. Enter what you will really have.

Re-run it every year

The right answer moves with your circumstances and with the law. A rent increase, a home loan ending, a change of city, a new employer or a revision to the standard deduction can each flip it. Treat it as an annual calculation rather than a settled preference — and if you rent, use the version that includes HRA, since omitting it is the most common flaw in a regime comparison.

Frequently asked questions

Is the new tax regime always better?

No. The new regime wins when you have few deductions. If you claim large HRA, home-loan interest and 80C/80D/NPS deductions, the old regime can be cheaper — this calculator compares your actual numbers under both.

What deductions does the old regime allow that the new one doesn't?

HRA exemption, home-loan interest under section 24(b), 80C (LIC/ELSS/PPF/etc.), 80D health insurance, and the NPS 80CCD(1B) deduction — none of which the new regime allows (except employer NPS 80CCD(2)).

Is income up to ₹12 lakh tax-free under the new regime?

Yes — for AY 2026-27 the section 87A rebate makes income up to ₹12 lakh effectively tax-free under the new regime (a salaried person's break-even is a little higher with the ₹75,000 standard deduction).

Can I switch between the old and new regime every year?

A salaried person with no business income can choose the regime each year while filing. Those with business or professional income have restrictions on switching back to the new regime once they opt out.