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Compare Old vs New Tax Regimes for FY 2025-26 and plan your investments to save maximum tax.
Taxable Income: ₹11,25,000
Taxable Income: ₹9,75,000
You save ₹1,11,800 by choosing the New Regime.
Standard Deduction for New Regime is ₹75,000. For Old Regime, it remains ₹50,000.
In the New Regime for FY 2025-26, income up to ₹12 Lakhs is tax-free due to rebate (₹7 Lakhs for FY 2024-25). In the Old Regime, this limit is ₹5 Lakhs.
Choosing between the Old and New Tax Regimes depends heavily on your investment habits and eligible deductions. Here's a quick guide to help you decide.
Best if you have high investments in 80C (PPF, ELSS), pay high house rent (HRA), or have a home loan (Section 24b). It allows you to reduce your taxable income significantly.
Best if you want lower tax rates and don't want the hassle of managing investment proofs. It offers higher rebate limits and lower tax slabs but removes most deductions.
| Income Slab | Tax Rate |
|---|---|
| ₹0 - ₹4,00,000 | Nil |
| ₹4,00,001 - ₹8,00,000 | 5% |
| ₹8,00,001 - ₹12,00,000 | 10% |
| ₹12,00,001 - ₹16,00,000 | 15% |
| ₹16,00,001 - ₹20,00,000 | 20% |
| ₹20,00,001 - ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
FY 2024-25 slabs: Nil to ₹3L, 5% to ₹7L, 10% to ₹10L, 15% to ₹12L, 20% to ₹15L, 30% above.
For the New Tax Regime, the standard deduction is ₹75,000. For the Old Tax Regime, it remains at ₹50,000.
Salaried individuals can choose between the two regimes every year at the time of filing their ITR. However, individuals with business income can only switch once in their lifetime.
Yes, technically there is tax, but due to the rebate under Section 87A, the net tax payable becomes zero for taxable income up to ₹12 Lakhs (₹7 Lakhs for FY 2024-25).
Common deductions include Section 80C (up to ₹1.5L), 80D (Health Insurance), HRA (House Rent Allowance), and Section 24b (Home Loan Interest up to ₹2L).