Old vs New Tax Regime FY 2025-26: Which One to Choose?
After Budget 2025, the new regime offers nil tax up to ₹12L. When does the old regime still win?
Union Budget 2025 made the new regime extremely attractive: zero tax up to ₹12,00,000 taxable income (₹12,75,000 for salaried after the ₹75,000 standard deduction). But the old regime still wins for many people. Here's how to decide.
New Regime FY 2025-26 slabs
- 0 – ₹4,00,000 — Nil
- ₹4 – 8,00,000 — 5%
- ₹8 – 12,00,000 — 10%
- ₹12 – 16,00,000 — 15%
- ₹16 – 20,00,000 — 20%
- ₹20 – 24,00,000 — 25%
- Above ₹24,00,000 — 30%
Standard deduction: ₹75,000. 87A rebate makes tax nil up to ₹12L taxable income.
Old Regime slabs
- 0 – ₹2,50,000 — Nil
- ₹2.5 – 5,00,000 — 5% (rebate makes ₹5L tax-free)
- ₹5 – 10,00,000 — 20%
- Above ₹10,00,000 — 30%
Standard deduction: ₹50,000. Major deductions allowed: 80C (₹1.5L), 80D, HRA, home-loan interest (₹2L), NPS, 80G and more.
Rule of thumb
Old regime usually wins if your total deductions exceed roughly:
- ~₹2.5L of deductions at ₹10L income
- ~₹4L of deductions at ₹15L income
- ~₹4.25L of deductions at ₹20L+ income
New regime is better when
- You're salaried with no major investments or home loan
- Your taxable income is below ₹12L (it's literally zero tax)
- You don't want to track 80C/80D proofs
Don't guess — run the numbers in our Income Tax Calculator. It computes both regimes with surcharge and cess so you pick the one that saves more.
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