Tax SlabsNew or old tax regime: how to compare them for 2026-27
The new regime has lower rates and almost no deductions. The old regime has higher rates and many deductions. Neither is better for everyone. The question is a single number: how much can you deduct in the old regime?
The break-even table
For a salaried person below 60 with no other income, this table shows the tax in each regime and the deductions the old regime needs, besides its standard deduction of ₹50,000, to bring its tax down to the new regime's.
| Salary in the year | New regime tax | Old regime tax, no deductions | Deductions for the old regime to match |
|---|---|---|---|
| ₹7,00,000 | ₹0 | ₹44,200 | about ₹1,50,000 |
| ₹9,00,000 | ₹0 | ₹85,800 | about ₹3,50,000 |
| ₹10,00,000 | ₹0 | ₹1,06,600 | about ₹4,50,000 |
| ₹12,00,000 | ₹0 | ₹1,63,800 | about ₹6,50,000 |
| ₹12,75,000 | ₹0 | ₹1,87,200 | about ₹7,25,000 |
| ₹15,00,000 | ₹97,500 | ₹2,57,400 | about ₹5,44,000 |
| ₹18,00,000 | ₹1,50,800 | ₹3,51,000 | about ₹6,42,000 |
| ₹20,00,000 | ₹1,92,400 | ₹4,13,400 | about ₹7,08,000 |
| ₹25,00,000 | ₹3,19,800 | ₹5,69,400 | about ₹8,00,000 |
| ₹30,00,000 | ₹4,75,800 | ₹7,25,400 | about ₹8,00,000 |
| ₹40,00,000 | ₹7,87,800 | ₹10,37,400 | about ₹8,00,000 |
| ₹50,00,000 | ₹10,99,800 | ₹13,49,400 | about ₹8,00,000 |
Tax includes 4% cess. Worked out from the slabs on this site for tax year 2026-27. "Deductions" means everything subtracted in the old regime other than the standard deduction: 80C, 80D, home loan interest, exempt house rent allowance and so on.
How to use it
- Add up what you can really claim in the old regime: section 80C (up to ₹1,50,000), health insurance, home loan interest (up to ₹2,00,000 for your own home), exempt house rent allowance, National Pension System.
- Find your salary in the table. If your total is below the last column, the new regime gives the lower tax. If it is above, the old regime does.
- For exact figures, put your income and deductions in the calculator. It shows both regimes side by side and the break-even amount for your income.
What the table shows
- Up to a salary of ₹12,75,000, the new regime tax is nil, so no amount of deductions makes the old regime lower.
- At a salary of ₹20,00,000, the old regime needs deductions of about ₹7,08,000 to match. A person who claims only section 80C and health insurance does not reach that.
- The break-even amount rises with income and then levels off, because the new regime's advantage comes from its wider slabs.
Things the arithmetic does not see
- Money put into 80C investments is locked in for years. Tax should not be the only reason to invest.
- A home loan or a rented house changes the picture a lot; both count only in the old regime.
- Rules can change in the next Budget.
Common questions
Which regime is better, new or old?
It depends only on your deductions. The table on this page shows, for each salary, how much you would need in deductions for the old regime to give the same tax. Below that amount the new regime gives the lower tax.
Can I switch between the regimes every year?
A person with no income from business or profession can choose each year in the return. A person with business income who leaves the new regime can come back to it only once.
Does my employer need to know my choice?
Employers ask which regime to use for deducting tax from salary. The final choice is made in the return, so the regime in the return can differ from the one used for the salary deductions.
Sources
- Slabs of both regimes, surcharge and cess for tax year 2026-27: Memorandum explaining the provisions of the Finance Bill, 2026, Ministry of Finance (February 2026), which states that no change is proposed in these rates.
- The same rates, the rebate limits and the deduction limits for financial year 2025-26: Income Tax Department, e-filing portal help page "Salaried Individuals for AY 2026-27".
- Checked on 11 November 2026.
Rates checked on 11 November 2026 against the Finance Bill, 2026 memorandum and the Income Tax Department's e-filing help pages. Tax law changes with every Budget and has many special cases. This page is general information and arithmetic, not tax advice: confirm your own position at incometax.gov.in or with a tax professional.