Tax-Saving Calculator (Old vs New Regime)

⚡ In shortFind the regime that saves you the most for AY 2026-27, and see exactly how much more you could save by using 80C, 80D, HRA and NPS — free and instant.

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How it is calculated

The calculator computes your tax under the new regime (₹75,000 standard deduction, income up to ₹12 lakh effectively tax-free via the 87A rebate) and the old regime (with your deductions), and shows which is cheaper. It then shows the additional saving if you max out 80C (₹1.5 lakh), 80D (₹25,000) and NPS 80CCD(1B) (₹50,000) under the old regime.

Count what already fills 80C before investing anything

The ₹1.5 lakh limit is usually part-consumed before you make a single new investment, and the most common planning error is not checking that first. Employee provident fund deducted from salary counts. So does the principal portion of a home loan EMI, which the bank sets out separately in its annual statement. So do children's school and college tuition fees for up to two children, and the stamp duty and registration paid in the year a house is bought. Add those together before deciding what to invest, because a well-paid employee with a home loan and school fees may find the limit already full — in which case an ELSS investment made purely to save tax will save none at all. Remember too that the ₹1.5 lakh ceiling is shared with 80CCC and with your own NPS contribution under 80CCD(1); these are not separate buckets.

The ₹50,000 that sits outside the limit

The additional deduction for NPS under section 80CCD(1B) is genuinely separate from the ₹1.5 lakh ceiling, which makes it the one straightforward way to increase total deductions once 80C is full. It is capped at ₹50,000 and takes the combined figure to ₹2 lakh under the old regime. Distinct from that is the employer's contribution to NPS under section 80CCD(2), which is not part of your own limit at all and — importantly — survives in the new regime, where almost nothing else does. For someone in a higher bracket whose employer offers it, restructuring salary to include an NPS contribution is often the single largest remaining deduction available. The trade-off is liquidity: NPS is locked until retirement in substantial part, and a portion of the maturity value must be used to buy an annuity, so treat it as retirement planning rather than as a tax device.

Lock-in is the real difference between the options

The 80C options are not interchangeable, and the clearest way to separate them is by when you get the money back. ELSS has a three-year lock-in, the shortest in the category, with returns that follow the equity market. Tax-saving fixed deposits and NSC lock in for five years at a fixed and modest return. PPF runs fifteen years, though partial withdrawal and loans become available on defined terms, and it remains a strong instrument for a long-horizon goal. Life insurance premiums commit you for many years, and discontinuing early can claw back deductions already taken. This is why the policy sold in the last week of March is so often the wrong purchase — a decision driven by a deadline rather than by a horizon. For protection, term insurance bought separately is almost always better value than a bundled endowment or ULIP product.

None of this applies if you are in the new regime

Everything above is relevant only under the old regime. The new regime is now the default, and it removes 80C, 80D, HRA and the interest deduction on a self-occupied property; what remains for a salaried taxpayer is the ₹75,000 standard deduction and the employer's NPS contribution under 80CCD(2). That does not make PPF, ELSS or insurance pointless — it changes the reason for holding them. Insurance was never a tax instrument: term cover protects your family and health cover protects you from hospital bills, and a single serious claim dwarfs any deduction. PPF and equity funds remain sound long-term savings. What changes is that the lock-in is no longer being tolerated in exchange for a deduction, so choose on return, liquidity and goal instead. Run both regimes on your own numbers each year before assuming which applies to you.

The deductions people forget once 80C is full

Under the old regime there is a good deal available beyond section 80C, and it is often overlooked precisely because attention stops when the ₹1.5 lakh limit fills. Health insurance premiums under 80D, up to ₹25,000 for yourself and family and a separate amount again for parents, with higher limits where they are senior citizens. Interest on a housing loan under section 24(b), up to ₹2 lakh for a self-occupied property, entirely outside 80C. Interest on an education loan under 80E, with no monetary ceiling, for a defined number of years. Donations to eligible institutions under 80G. Savings account interest under 80TTA, and the wider deduction under 80TTB for senior citizens which includes deposit interest. Treatment of specified illnesses under 80DDB and support of a disabled dependant under 80DD. Working through this list is usually more productive than buying another 80C product.

March buying is the expensive way to do this

The annual pattern is familiar: the employer asks for investment proofs in January, and decisions get made in the last fortnight of the financial year. That is how long-dated insurance policies end up being bought to fill a limit, committing the buyer to premiums for years and imposing a real cost if discontinued. The better approach is to work out in April how much of the limit will fill by itself through provident fund, tuition fees and home loan principal, and to invest the balance in monthly instalments across the year. That spreads market risk instead of concentrating a lump sum on a single day, avoids the cash crunch, and leaves the decision to be made on the merits of the instrument rather than the proximity of a deadline. And it should follow, not precede, the decision about which regime you are in — under the new regime the whole exercise is moot.

Keep the proof, because it may be asked for later

Documents supporting a deduction are not submitted with the return, which leads to the assumption that they are not needed. They are needed if the claim is ever examined, and a deduction that cannot be evidenced is removed with interest and sometimes a penalty. Keep the PPF passbook, the ELSS statement, insurance premium receipts, tuition fee receipts, the bank's annual interest and principal certificate for a housing loan, donation receipts with the institution's registration details, and rent receipts with the landlord's PAN where applicable. Digital copies are acceptable. Keep them year by year for at least six years, since assessments can be reopened for a considerable period. One more point worth attention: what you declare to your employer and what you claim in your return should agree, because a difference between the two is trivially easy to notice and invites scrutiny of an otherwise sound claim.

Frequently asked questions

Is the Rs 50,000 NPS deduction separate from 80C?

Yes. The additional deduction under section 80CCD(1B) sits outside the Rs 1.5 lakh ceiling, taking the combined figure to Rs 2 lakh under the old regime. The employer's contribution under 80CCD(2) is separate again and is one of the few deductions that survives in the new regime.

Do I still need PPF or ELSS under the new regime?

For tax, no — the new regime allows neither. But the reason for holding them changes rather than disappears: they remain sound long-term savings, and insurance was never a tax instrument. Choose on return, liquidity and goal instead of on the deduction.

Which tax regime should I choose?

Compute both. The old regime can win if your deductions are large (80C, 80D, HRA, home-loan interest); otherwise the new regime usually wins. This tool compares them for you.

How can I save more tax legally?

Use the deductions that fit you — 80C investments, 80D health insurance, HRA, home-loan interest and the extra ₹50,000 NPS deduction under 80CCD(1B) (old regime).

Is this tax advice?

No. The better choice depends on your numbers. Confirm with a CA before filing.