Old vs new tax regime: the break-even table

The new regime has lower rates and a bigger rebate; the old regime lets you subtract deductions such as 80C, HRA and home loan interest. So the question is simple: are your deductions big enough to make up for the old regime’s higher rates?

The break-even table for Tax Year 2026-27

The last column is the total of old-regime deductions and exemptions (80C, 80D, NPS, HRA, home loan interest, professional tax and so on, but not the standard deduction) at which the old regime becomes as cheap as the new one. If yours are higher, the old regime wins.

Salaried resident below 60, no other income. Both regimes include 4% cess; the new regime uses the ₹75,000 standard deduction, the old ₹50,000.

What this means in practice

• Up to ₹12.75 lakh: the new regime costs nothing, so it can never lose.
• ₹13 to ₹20 lakh: you need ₹5.4–7 lakh of deductions. Full 80C (₹1.5 lakh), 80D (₹25,000–75,000), NPS (₹50,000) and a ₹2 lakh home loan interest come to about ₹4.5–5 lakh. Only a sizeable HRA exemption in a big city usually tips it.
• Above ₹24 lakh: the gap settles at about ₹8 lakh of deductions, which very few people reach.

Your numbers will differ with HRA, parents’ health cover and other income. Put them in the income tax calculator: it stamps the winner and tells you how far you are from the break-even point.

Can I change my mind?

Yes. Salaried people choose each year when filing the return, whatever they told their employer for TDS. People with business income can leave the new regime only once.

Questions people ask