Claiming 80C, HRA or a home loan?
Old or new tax regime: which leaves you more?
- Your tax both ways
- The deductions the old regime needs to win
- What each unused section would save
- Old regime needs
- ₹5.87 L
- of deductions to break even
- You claim
- ₹4.47 L
- beyond the standard deduction
What you keep as deductions grow
Salary and other income, minus income tax and professional tax, for every level of old-regime deductions.
Your inputs
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What this means
- The new regime saves you ₹43,479 a year, about ₹3,623 a month.
Why?
The old regime needs ₹5.87 L of deductions beyond its standard deduction to match the new one. You claim ₹4.47 L.
- Even with 80C, 80D and NPS full, the old regime costs ₹20,079 more.
Why?
The new regime's lower slabs outweigh every deduction you could add. Invest for your goals, not for tax.
- You can switch every year when you file your return, if you have no business income.
Why?
The new regime is the default. Tell your employer your choice in April so the right TDS is cut; if you choose differently when filing, the difference comes back as a refund or is paid as tax.
More details
The tax, both ways
| A year | New regimePays less | Old regime |
|---|---|---|
| Salary | ₹16.49 L | ₹16.49 L |
| −Deductions | ₹75,000 | ₹4.97 L |
| =Taxable income | ₹15.74 L | ₹11.51 L |
| Tax at slab rates | ₹1.16 L | ₹1.58 L |
| +Cess, 4% | ₹4,642 | ₹6,315 |
| =Income tax | ₹1.21 L | ₹1.64 L |
Deductions in the new regime are the ₹75,000 standard deduction and any employer NPS. The old regime has a ₹50,000 standard deduction plus everything below.
Your old-regime deductions
- HRA on rent you pay · 10(13A)₹2.7 L
- PF, PPF, ELSS, life cover, loan principal · 80C₹1.5 L of ₹1.5 L
- Health insurance · 80D₹25,000 of ₹50,000
₹25,000 more would save ₹7,800 in the old regime.
- Your own NPS · 80CCD(1B)₹0 of ₹50,000
₹50,000 more would save ₹15,600 in the old regime.
- Home-loan interest · 24(b)₹0 of ₹2 L
- Professional tax · 16(iii)₹2,500
How it's calculated
- Salary: your CTC is split the usual way: basic as you set it, HRA at 50% of basic in a metro and 40% elsewhere, 10% variable pay, gratuity and PF inside the CTC, and a special allowance for the rest.
- New regime: a ₹75,000 standard deduction and employer NPS up to 14% of basic. No tax up to ₹12 lakh of taxable income after the 87A rebate, with marginal relief just above it.
- Old regime: a ₹50,000 standard deduction, professional tax, HRA (the lowest of HRA received, rent minus 10% of basic, and 50% or 40% of basic), 80C up to ₹1.5 lakh with your PF counted, 80D, your own NPS up to ₹50,000 under 80CCD(1B), home-loan interest up to ₹2 lakh, and employer NPS up to 10% of basic.
- Tax: slab rates, then the rebate, surcharge above ₹50 lakh and 4% cess. Other income is added to salary at the same slab rates in both regimes.
- Break-even: the old-regime deductions, beyond the standard deduction, at which both regimes charge the same tax.
Capital gains, agricultural income and senior-citizen slabs aren't covered. Check your final figures when you file your return.
Tax figures follow Budget 2025 rules, for FY 2025-26 onward.