This is the question we hear most often, at weddings, in office canteens, everywhere: 'Bhai, new regime ya old regime?' The honest answer is that it depends on your deductions, but the math is simple once you see it.
The new regime slabs for FY 2025-26
- ✓Up to Rs 4 lakh: nil
- ✓Rs 4 to 8 lakh: 5%
- ✓Rs 8 to 12 lakh: 10%
- ✓Rs 12 to 16 lakh: 15%
- ✓Rs 16 to 20 lakh: 20%
- ✓Rs 20 to 24 lakh: 25%
- ✓Above Rs 24 lakh: 30%
On top of this, the Section 87A rebate wipes out tax completely if your taxable income is up to Rs 12 lakh. With the Rs 75,000 standard deduction, a salaried person earning up to Rs 12.75 lakh pays zero tax in the new regime. Zero.
When does the old regime still win?
The old regime keeps its familiar slabs (5% above Rs 2.5 lakh, 20% above Rs 5 lakh, 30% above Rs 10 lakh) but lets you claim deductions: Section 80C up to Rs 1.5 lakh, health insurance under 80D, HRA, home loan interest and more. As a rough rule, if your total deductions cross Rs 4 to 4.5 lakh, the old regime starts becoming competitive at higher incomes.
A real example
Priya earns Rs 15 lakh. In the new regime she pays about Rs 97,500 plus cess. In the old regime with Rs 1.5 lakh in 80C, Rs 25,000 in 80D and Rs 1 lakh HRA exemption, she pays about Rs 1.4 lakh. The new regime saves her over Rs 40,000. But her colleague Arjun, with a big home loan and rent in Mumbai, does better in the old regime.
The easy way out
You do not have to decide. Saathi.Tax computes your full return under both regimes on your actual numbers and files whichever one saves you more. Try the free calculator on our tools page and see your own comparison in seconds.
