Old vs New Tax Regime Calculator (FY 2024-25 & FY 2025-26)
The New vs Old Tax Regime comparison determines whether an Indian taxpayer pays less income tax under the default concessional slab system (Section 115BAC) or the traditional deduction-heavy system. In FY 2024-25/2025-26, the New Regime offers an enhanced ₹75,000 standard deduction and tax-free income up to ₹7.75 Lakhs, while the Old Regime requires over ₹3.75 Lakhs in deductions to break even.
Taxable Income & Deductions
Total earnings before applying any chapter VI-A deductions or exemptions
Statutory maximum cap: ₹1,50,000 per financial year
Up to ₹25,000 for self/family (+ up to ₹25,000 for senior citizen parents)
Exempt portion of House Rent Allowance based on rent receipts
Deduction on self-occupied house property interest (Max ₹2,00,000)
Additional voluntary NPS contribution deduction up to ₹50,000
| Component | New Tax Regime | Old Tax Regime |
|---|---|---|
| Gross Income | ₹15,00,000 | ₹15,00,000 |
| Total Deductions Claimed | ₹75,000 | ₹3,95,000 |
| Net Taxable Income | ₹14,25,000 | ₹11,05,000 |
| Tax Before Cess | ₹1,25,000 | ₹1,44,000 |
| Health & Education Cess (4%) | ₹5,000 | ₹5,760 |
| Total Tax Liability | ₹1,30,000 | ₹1,49,760 |
You save ₹19,760 in taxes by selecting the New Tax Regime!
Breakeven Deduction Benchmark
For an income of ₹15,00,000, you need at least ₹3,75,000 in total deductions (80C + 80D + HRA + Home Loan) for the Old Regime to beat the New Regime.
Tax Burden Comparison
Tax computation under both regimes applies the progressive bracket model followed by mandatory statutory cess:
// 1. New Tax Regime (Section 115BAC - Budget 2024 Slabs)
Taxable Income = Gross Income - ₹75,000 Standard Deduction
If Taxable Income <= ₹7,00,000 -> Full Rebate under Section 87A (Tax = ₹0)
Tax Slabs: ₹3L-7L (5%), ₹7L-10L (10%), ₹10L-12L (15%), ₹12L-15L (20%), >₹15L (30%)
// 2. Old Tax Regime
Taxable Income = Gross Income - [₹50k SD + 80C + 80D + HRA + Sec 24(b) + NPS]
If Taxable Income <= ₹5,00,000 -> Rebate under Section 87A up to ₹12,500
Tax Slabs: ₹2.5L-5L (5%), ₹5L-10L (20%), >₹10L (30%)
// 3. Health & Education Cess
Total Tax Payable = Base Tax * 1.04 (Includes 4% statutory cess)
Scenario: Ankit earns ₹15,00,000 gross salary in Mumbai. Under the Old Regime, he claims ₹1,50,000 (80C), ₹25,000 (80D), and ₹1,20,000 (HRA). Total Old Regime deductions = ₹3,45,000 (including ₹50k SD).
| Comparison Metric | New Tax Regime (FY 2024-25/26) | Old Tax Regime (With Deductions) |
|---|---|---|
| Gross Income | ₹15,00,000 | ₹15,00,000 |
| Standard Deduction | ₹75,000 (Enhanced) | ₹50,000 |
| Chapter VI-A Deductions | ₹0 (Disallowed) | ₹2,95,000 (80C + 80D + HRA) |
| Net Taxable Income | ₹14,25,000 | ₹11,55,000 |
| Base Income Tax | ₹1,25,000 | ₹1,59,000 |
| Total Tax (incl. 4% Cess) | ₹1,30,000 (Saves ₹35,360!) | ₹1,65,360 |
*Conclusion: Even with ₹2.95 Lakhs in voluntary investments and rent, Ankit saves ₹35,360 under the New Tax Regime due to significantly lower tax slabs and the ₹75,000 standard deduction.
Side-by-Side Slabs: New vs Old Tax Regime
| New Tax Regime Slabs | New Tax Rate | Old Tax Regime Slabs | Old Tax Rate |
|---|---|---|---|
| ₹0 to ₹3,00,000 | NIL | ₹0 to ₹2,50,000 | NIL |
| ₹3,00,001 to ₹7,00,000 | 5% (Full 87A Rebate) | ₹2,50,001 to ₹5,00,000 | 5% (Full 87A Rebate) |
| ₹7,00,001 to ₹10,00,000 | 10% | ₹5,00,001 to ₹10,00,000 | 20% |
| ₹10,00,001 to ₹12,00,000 | 15% | Above ₹10,00,000 | 30% |
| ₹12,00,001 to ₹15,00,000 | 20% | - | - |
| Above ₹15,00,000 | 30% | - | - |
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Frequently Asked Questions (Old vs New Tax Regime)
What are the new income tax slabs under the New Tax Regime in Budget 2024?
For FY 2024-25 and FY 2025-26, the New Tax Regime slabs are: ₹0 to ₹3L: Nil; ₹3L to ₹7L: 5%; ₹7L to ₹10L: 10%; ₹10L to ₹12L: 15%; ₹12L to ₹15L: 20%; and Above ₹15L: 30%. In addition, salaried employees receive an increased standard deduction of ₹75,000.
What is the breakeven deduction level where the Old Regime becomes better than the New Regime?
For middle and upper-middle income earners (₹10 Lakhs to ₹15 Lakhs), you typically require total deductions of at least ₹3.75 Lakhs to ₹4.25 Lakhs (combining Section 80C, 80D, HRA exemption, and Section 24 home loan interest) for the Old Tax Regime to deliver higher tax savings than the New Regime.
Can salaried individuals switch between Old and New Tax Regimes every year?
Yes. Salaried individuals with no business or professional income can switch between the Old and New Tax Regimes every financial year at the time of filing their Income Tax Return (ITR-1 or ITR-2) under Section 139(1). However, individuals with business income can opt out of the new regime only once in a lifetime.
How does the Section 87A rebate differ between the New and Old Regimes?
Under the New Tax Regime, Section 87A provides a full rebate on taxable income up to ₹7,00,000 (meaning zero tax up to ₹7.75 Lakhs gross income for salaried employees). In contrast, the Old Tax Regime limits the Section 87A rebate to a taxable income of ₹5,00,000 (maximum rebate of ₹12,500).
Is the ₹75,000 standard deduction available in the Old Tax Regime as well?
No. The enhanced ₹75,000 standard deduction introduced in Finance Act 2024 applies strictly to the New Tax Regime (Section 115BAC). Under the Old Tax Regime, the standard deduction for salaried individuals remains capped at the earlier level of ₹50,000.