The one-line answer
If your total old-regime deductions (80C + 80D + HRA exemption + home loan interest + NPS, excluding standard deduction) are less than about ₹4.5 lakh, the new regime almost certainly wins. Above that, run the numbers in our tax calculator.
Why the new regime wins for most people
Since Budget 2025 (retained in Budget 2026), the new regime gives: zero tax up to ₹12 lakh taxable income (₹12.75L gross for salaried, thanks to the ₹75,000 standard deduction), wider slabs (5% starts at ₹4L; 30% only above ₹24L), and no paperwork. The old regime's slabs are brutal in comparison — 20% starts at just ₹5 lakh and 30% at ₹10 lakh — so its deductions have to work very hard to compensate.
Break-even deductions by income
Approximate old-regime deductions (beyond standard deduction) needed just to MATCH the new regime for a salaried taxpayer:
| Gross Salary | New Regime Tax | Deductions Needed to Break Even |
|---|---|---|
| ₹10,00,000 | ₹0 | Old regime can never win (new = zero) |
| ₹12,75,000 | ₹0 | Old regime can never win (new = zero) |
| ₹15,00,000 | ~₹97,500 | ~₹4.1 lakh+ |
| ₹20,00,000 | ~₹1,92,400 | ~₹4.6 lakh+ |
| ₹30,00,000 | ~₹4,68,000 | ~₹4.9 lakh+ |
Reaching ₹4.5+ lakh of deductions typically requires all three of: full ₹1.5L in 80C, ₹2L home loan interest, and meaningful HRA exemption or ₹50K NPS. Renters without home loans rarely get there.
Who should still consider the old regime
- Home-loan holders claiming the full ₹2 lakh interest deduction while also paying high rent-city HRA earlier in the year
- High HRA earners in metros (HRA exemption can alone exceed ₹2-3 lakh)
- Those with employer NPS (80CCD(2)) note: this deduction is available in BOTH regimes
Practical notes for FY 2026-27
- The new regime is the default — do nothing and you're in it.
- Salaried taxpayers can switch regimes every year at filing time; business income holders can switch back only once.
- Even if you pick the new regime, PPF/ELSS remain good investments — you just don't get the 80C deduction for them.
- ITR filing deadline for non-audit individuals is 15 September; belated returns cost late fees.
Check your exact numbers
Three inputs, ten seconds: Income Tax Calculator FY 2026-27 →