Income Tax Calculator — Old vs New Regime (FY 2025-26)

About the Tax Calculator

India now has two income tax regimes. The new regime (introduced 2020, enhanced in Budget 2024) has lower rates but strips away most deductions. The old regime has higher rates but lets you claim 80C (₹1.5L), HRA, home loan interest (Sec 24, up to ₹2L), NPS contribution (Sec 80CCD-1B, ₹50K), medical insurance (Sec 80D), education loan interest (Sec 80E), and a list of smaller items. Picking the right regime can swing your tax outgo by ₹50,000–₹2,00,000 per year for a typical mid-to-upper income earner.

For FY 2025-26, income up to ₹7 lakh effectively pays zero tax under the new regime (via Section 87A rebate + standard deduction of ₹75,000). This has pushed most salaried taxpayers below ₹15L gross toward the new regime, which is also the simpler choice — no need to track receipts, fund proofs, rent agreements, or LIC premiums for tax purposes. Simplicity has real value when you're filing a return.

This calculator compares both regimes side-by-side using your gross income and deductions. Tip: ignore HRA in the comparison if you're choosing new regime — you can't claim it there anyway. Run multiple scenarios: full deductions in old regime, partial deductions, and new regime, then pick the one with the lowest tax. Sometimes adding ₹50,000 of NPS (80CCD-1B) flips the comparison from new regime to old regime; sometimes a home loan interest of ₹2L is enough to do that flip.

Break-even analysis for FY 2025-26: at ₹10 lakh gross, new regime always wins (it has lower rates and the rebate makes effective tax zero up to ₹7L). At ₹15 lakh gross, old regime wins only if you have ~₹4L+ of deductions stacked. At ₹25 lakh gross, old regime wins if you have ₹4.5L+ deductions. At ₹50 lakh gross, the math leans toward old regime if you have ₹4.75L+ deductions. The bigger your salary, the more likely old regime makes sense — because more deductions are practically usable.

Critical filing notes: salaried individuals can switch regime every year while filing ITR — your in-year TDS regime choice (declared to employer in April) is just an estimation tool, you can override at filing. Business/professional income earners get only one switch from new to old, then are locked. The new regime is the default from FY 2024-25 onward — if you do nothing, you're treated as new regime. For exact tax with surcharges (10% above ₹50L, 15% above ₹1Cr, 25% above ₹2Cr, 37% above ₹5Cr in old regime — capped at 25% in new regime), use the official Income Tax e-filing portal calculator before filing.