New vs Old Tax Regime Breakeven Calculator

FY 2026-27 (AY 2027-28) · Budget 2025 Slabs · Section 87A Rebate Included

Enter your salary and deductions to instantly find out which tax regime saves you more money — and the exact breakeven deduction amount.

▼ Calculate Now | How It Works | FAQs
✓ Budget 2025 Updated ✓ 87A Rebate Auto-Applied ✓ FY 2026-27

₹ Income & Deductions

₹15,00,000
₹3L₹50L

Old Regime Deductions

₹

Max ₹1,50,000

₹

Not available in New Regime

₹

Self ₹25K + Parents ₹50K

₹

Max ₹50,000

₹

Max ₹2,00,000 (self-occupied)

₹
New Regime Default
Std. Deduction₹75,000
Taxable Income—
Tax Before Rebate—
Sec 87A Rebate—
4% Cess—
Total Tax Payable—
Effective Tax Rate—
Old Regime
Std. Deduction₹50,000
Total Deductions—
Taxable Income—
Tax Before Rebate—
Sec 87A Rebate—
4% Cess—
Total Tax Payable—
Effective Tax Rate—

New vs Old Tax Regime — Complete Guide for FY 2026-27

What is the New Tax Regime?

Introduced in Budget 2020 and made the default from FY 2025-26, the New Tax Regime offers lower slab rates but removes most deductions and exemptions. From Budget 2025, the rebate under Section 87A was increased from ₹25,000 to ₹60,000 — making income up to ₹12 lakh (salaried: ₹12.75L) effectively tax-free.

What is the Old Tax Regime?

The legacy tax regime with three slabs (5%, 20%, 30%) but allows 70+ deductions and exemptions including Section 80C (₹1.5L), HRA, Section 80D, NPS 80CCD(1B), home loan interest Section 24(b), LTA, and more. Requires active opt-in via Form 10-IEA for salaried employees.

FY 2026-27 Tax Slabs — Side-by-Side Comparison

New Tax Regime Slabs (Default)

FY 2026-27
Taxable Income Slab Tax Rate
Up to ₹4,00,0000% (Nil)
₹4,00,001 – ₹8,00,0005%
₹8,00,001 – ₹12,00,00010%
₹12,00,001 – ₹16,00,00015%
₹16,00,001 – ₹20,00,00020%
₹20,00,001 – ₹24,00,00025%
Above ₹24,00,00030%

✨ Section 87A Rebate: Taxable income up to ₹12 Lakh gets ₹60,000 rebate (Zero Tax). Salaried gets ₹75,000 Standard Deduction (Zero tax up to ₹12.75 Lakh).

Old Tax Regime Slabs (Opt-in)

Form 10-IEA
Taxable Income Slab Tax Rate
Up to ₹2,50,0000% (Nil)
₹2,50,001 – ₹5,00,0005%
₹5,00,001 – ₹10,00,00020%
Above ₹10,00,00030%

✨ Section 87A Rebate: Taxable income up to ₹5 Lakh gets ₹12,500 rebate (Zero Tax). Allows 80C, 80D, HRA, and Home Loan interest deductions.

* 4% Health & Education Cess applies on total tax payable across all regimes.

Which Deductions Are Allowed in Each Regime?

Deduction Max Amount New Regime Old Regime
Standard Deduction₹75,000 / ₹50,000✓ ₹75,000✓ ₹50,000
Section 80C₹1,50,000✗✓
HRA Exemption (Sec 10(13A))Actual Exempt Amount✗✓
Section 80D Health Insurance₹25K + ₹50K parents✗✓
NPS 80CCD(1B)₹50,000✗✓
Home Loan Interest (Sec 24b)₹2,00,000✗✓
NPS Employer Contribution 80CCD(2)Up to 14% of salary✓✓
Section 87A Rebate₹60K (New) / ₹12.5K (Old)✓ ₹60,000✓ ₹12,500

Worked Examples — Finding the Breakeven

Example 1: ₹15L Salary, ₹2.25L Deductions

80C₹1,50,000
80D₹25,000
NPS 80CCD(1B)₹50,000
New Regime Tax₹62,400
Old Regime Tax₹1,04,000
New Saves₹41,600/yr

Example 2: ₹15L Salary, Metro HRA ₹3L + Full Deductions

80C + 80D + NPS₹2,25,000
HRA Exemption₹3,00,000
New Regime Tax₹62,400
Old Regime Tax₹42,000
Old Saves₹20,400/yr

⚠️ Important Notes & Common Mistakes

  • • New Regime is now the default — you must actively opt for Old Regime via Form 10-IEA before due date
  • • 87A rebate in new regime is ₹60,000 on taxable income up to ₹12 lakh (effectively ₹12.75L gross for salaried)
  • • Surcharge of 37% has been abolished in New Regime — cap is 25%. Old Regime still has 37% surcharge
  • • Loss from House Property cannot be set off against salary income in New Regime
  • • Employer NPS 80CCD(2) up to 14% of salary is allowed in New Regime — often overlooked
  • • Section 80CCD(1B) ₹50,000 NPS is NOT available in New Regime (only employer NPS 80CCD(2) is)

Quick Decision Chart by Salary Range

Gross Salary Breakeven Deduction Typical Recommendation
Up to ₹12.75L (Salaried)Any amountNew Regime (Zero Tax via 87A + ₹75k SD)
₹13L – ₹15L~₹3.0L – ₹3.75LNew Regime (unless high Metro HRA)
₹15L – ₹25L~₹3.75L – ₹4.75LOld if metro HRA + max 80C + Home Loan
Above ₹25L~₹4.75L+Old if high Metro HRA + Home Loan

Frequently Asked Questions

At what salary is New Tax Regime always better?
For salaried individuals with gross income up to ₹12.75 Lakhs (or ₹12 Lakhs for non-salaried), the New Tax Regime is unbeatable because total tax is ₹0 after standard deduction and Section 87A rebate. For higher incomes (₹15L–₹25L), New Regime is better unless your total eligible deductions exceed ₹3.75L–₹4.5L.
What deductions make Old Regime better than New?
The Old Regime becomes beneficial when total eligible deductions exceed the breakeven threshold. Key deductions are: Section 80C (₹1.5L), HRA exemption (can be ₹2-5L for metro cities), Section 80D health insurance (₹25K-₹1L), NPS 80CCD(1B) ₹50K, and Section 24(b) home loan interest (₹2L).
Is standard deduction ₹75,000 in New Tax Regime?
Yes. From FY 2025-26 onward, a flat standard deduction of ₹75,000 is available under the New Tax Regime for salaried employees and pensioners. The Old Regime standard deduction is ₹50,000.
Can I switch between New and Old regime every year?
Salaried individuals (no business income) can switch between regimes every financial year at the time of filing ITR. Business/professional income earners can switch only once from old to new — and once they switch back to old, they cannot go to new again unless they have no business income that year.
Which tax regime is better for ₹12 lakh salary?
For ₹12 lakh gross salary (salaried), the New Regime results in zero tax because after ₹75,000 standard deduction the taxable income becomes ₹11.25L, and the Section 87A rebate of ₹60,000 covers the entire tax liability — making effective tax nil.
Is HRA exemption available in New Tax Regime?
No. HRA exemption under Section 10(13A) is not available in the New Tax Regime. This is often the biggest reason why high-rent metro employees in top income brackets still find the Old Regime beneficial.
What is NPS 80CCD(2) and is it allowed in New Regime?
Yes! Section 80CCD(2) — the employer's contribution to NPS — is available in the New Tax Regime up to 14% of basic salary + DA. This is a significant benefit often missed by salaried employees. The employee's own NPS contribution under 80CCD(1B) (₹50,000) is NOT available in New Regime.
What is Form 10-IEA and when do I need it?
Form 10-IEA must be filed online on the income tax portal before the ITR due date (July 31 for non-audit) if you want to opt out of the New Regime and use the Old Regime. No form is required to stay in or move to the New Regime — it is the default from FY 2025-26.

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