The new regime is now the default with a higher rebate. Here is how to decide which one lowers your tax.
From FY 2025-26, the new tax regime offers nil tax up to ₹12 lakh of taxable income (thanks to an enhanced Section 87A rebate) and a ₹75,000 standard deduction for the salaried. But the old regime can still win if you claim significant deductions.
When the new regime wins
- You have few deductions (limited 80C, no home loan, low rent).
- Your income is at or below ₹12 lakh — you may pay zero tax.
When the old regime wins
- You claim large deductions: 80C (₹1.5L), 80D, HRA, and home loan interest (up to ₹2L).
The simplest approach: compute both. Our free income-tax calculator does this instantly, and a CA can confirm the optimal choice for your situation.
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