Quick Answer: Choose New Regime if total deductions < ₹3.75 lakh. Choose Old Regime if deductions > ₹3.75 lakh.
New Regime Slabs FY 2025-26
| Income Slab | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4L – ₹8L | 5% |
| ₹8L – ₹12L | 10% |
| ₹12L – ₹16L | 15% |
| ₹16L – ₹20L | 20% |
| ₹20L – ₹24L | 25% |
| Above ₹24L | 30% |
Standard deduction ₹75,000. Income up to ₹12L effectively tax-free via 87A rebate.
Old Regime Slabs FY 2025-26
| Income Slab | Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2.5L – ₹5L | 5% |
| ₹5L – ₹10L | 20% |
| Above ₹10L | 30% |
Standard deduction ₹50,000. All major deductions available: 80C, HRA, 80D, NPS, home loan interest.
Real Comparison — ₹15 Lakh Salary
| Item | Old Regime | New Regime |
|---|---|---|
| Standard Deduction | ₹50,000 | ₹75,000 |
| 80C Investments | ₹1,50,000 | Not allowed |
| HRA Exemption | ₹80,000 | Not allowed |
| 80D Health Insurance | ₹25,000 | Not allowed |
| Total Tax (incl. cess) | ₹1,64,372 | ₹1,89,500 |
Old Regime saves ₹25,128 here — because this person has strong deductions. Without deductions, New Regime wins by a similar margin.
Can You Switch Every Year?
Yes — salaried employees can switch between regimes each year while filing ITR. Business income earners can switch only once (back to Old Regime). Choose at ITR filing time, not when you declare investments to HR (that's just advance tax calculation).
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