New Regime Standard Deduction
₹75,000
Increased from ₹50,000 for salaried employees and pensioners under Section 115BAC.
Zero Tax Threshold (New Regime)
₹7,75,000
₹7L income u/s 87A rebate + ₹75k standard deduction = ₹0 tax for salaried individuals.
Default Regime Status
New Regime
New Tax Regime is default. You must explicitly opt for Old Regime when filing ITR.
Old vs New Tax Regime Slabs (FY 2026-27)
Compare tax rates between the streamlined New Regime and exemption-heavy Old Regime.
New Tax Regime (Default)
Section 115BAC • Lower Slabs, Minimal Deductions| Annual Income Slab | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil (0%) |
| ₹3,00,001 to ₹7,00,000 | 5% |
| ₹7,00,001 to ₹10,00,000 | 10% |
| ₹10,00,001 to ₹12,00,000 | 15% |
| ₹12,00,001 to ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Rebate u/s 87A: Full tax rebate if taxable income does not exceed ₹7,00,000. Marginal relief applicable if income slightly exceeds ₹7L.
Old Tax Regime (Optional)
Allows 80C, 80D, HRA, Home Loan Interest Deductions| Annual Income Slab | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil (0%) |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Rebate u/s 87A: Full tax rebate up to ₹12,500 if taxable income does not exceed ₹5,00,000 (effectively zero tax up to ₹5.5L for salaried).
Breakeven Deduction Threshold: When is Old Regime Better?
Because the New Regime offers lower slab rates and a ₹75,000 standard deduction, you need substantial eligible deductions (80C + 80D + HRA + Home Loan Interest) for the Old Regime to save you more tax.
Salary: ₹8,00,000
New Tax: ₹0 / ₹2,600
New Regime Definite
Breakeven: > ₹2.50L deductions
Salary: ₹12,00,000
New Tax: ₹71,500
Breakeven: ₹3,25,000
Old wins only with 80C + Home Loan
Salary: ₹15,00,000
New Tax: ₹1,30,000
Breakeven: ₹3,83,333
Old wins if HRA + 80C + 80D + NPS
Salary: ₹20,00,000
New Tax: ₹2,73,000
Breakeven: ₹4,25,000
Requires 80C + 80D + 24(b) + HRA
| Gross Total Income (₹) | Standard Deduction Diff. | Breakeven Deductions Required (₹) | Recommendation |
|---|---|---|---|
| Up to ₹7,75,000 | ₹25,000 higher in New | N/A (₹0 Tax in New) | Choose New Regime (Zero Tax) |
| ₹8,00,000 | ₹25,000 | ₹2,50,000 | New Regime is far simpler; Old requires ₹2.5L+ deductions |
| ₹10,00,000 | ₹25,000 | ₹2,87,500 | New is better unless you claim 80C + HRA > ₹2.88L |
| ₹12,00,000 – ₹12,50,000 | ₹25,000 | ₹3,25,000 – ₹3,37,500 | Old is better if high HRA + Home Loan interest |
| ₹15,00,000 | ₹25,000 | ₹3,83,333 – ₹3,87,500 | Old requires ₹3.84L+ in total deductions |
| ₹20,00,000 | ₹25,000 | ₹4,25,000 | Requires maximum 80C, 80D, 24(b), and HRA |
Eligible Tax Deductions & Exemptions (Old Regime)
Section 80C
Max ₹1.5 Lakh
Investments & Principal
- PPF (Public Provident Fund)
- EPF & VPF employee contribution
- ELSS Mutual Fund (3-yr lock-in)
- Sukanya Samriddhi (SSY)
- 5-Year Post Office Time Deposit
- Home Loan Principal Repayment
- Children Tuition Fees
Section 80D
₹25,000 – ₹1,00,000
Health Insurance Premiums
- Self, Spouse & Children: Up to ₹25,000
- Parents (<60 yrs): Additional ₹25,000
- Senior Citizen Parents (60+ yrs): Up to ₹50,000
- Preventive health check-up: Up to ₹5,000 (within limits)
Section 24(b)
Max ₹2.0 Lakh
Home Loan Interest
- Self-occupied property interest deduction up to ₹2,00,000 per financial year.
- Let-out property: No cap on actual interest, but loss set-off capped at ₹2 Lakh.
Section 10(13A)
Least of 3 Limits
House Rent Allowance (HRA)
- Actual HRA received from employer
- 50% of Basic Salary (Metro) or 40% (Non-metro)
- Actual Rent paid minus 10% of Basic Salary
Section 80CCD(1B)
Additional ₹50,000
National Pension System
- Exclusive ₹50,000 deduction for Tier 1 NPS investments over and above the Section 80C ₹1.5L ceiling.
- Employer NPS contribution u/s 80CCD(2) up to 14% (Central Govt) or 10% (Private) allowed in BOTH regimes!
Section 80TTA / 80TTB
₹10k / ₹50k
Savings & FD Interest
- 80TTA: Up to ₹10,000 savings bank account interest for individuals <60.
- 80TTB: Up to ₹50,000 interest on savings + FDs for senior citizens (60+).