Comparisons
Old vs New Tax Regime: Detailed Comparison FY 2025-26
Which tax regime saves more for salaried, freelancers, and investors — with deduction math.
New regime slabs (FY 2025-26)
| Income slab | Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4–8 lakh | 5% |
| ₹8–12 lakh | 10% |
| ₹12–16 lakh | 15% |
| ₹16–20 lakh | 20% |
| ₹20–24 lakh | 25% |
| Above ₹24 lakh | 30% |
Old regime deductions that matter
Section 80C (₹1.5L — PPF, ELSS, EPF, life insurance), 80D (health insurance ₹25K–₹50K), HRA exemption, home loan interest (₹2L), NPS 80CCD(1B) ₹50K. Old regime has higher slabs but these deductions reduce taxable income significantly.
Decision framework
- List all deductions you actually use — not hypothetical ones.
- Run both regimes in income tax calculator.
- If old saves >₹15,000/year and you will maintain 80C investments anyway, old may win.
- If minimal deductions, new regime's lower slabs usually win.
- HRA-heavy metro renters often need old regime.
Related tools
- Tax Guide for Investors
- Freelancer Tax Guide India
- hra-complete-guide
- Income Tax (Old vs New)
- HRA Exemption
Frequently asked questions
Can I switch regime every year?
Salaried employees can choose each financial year. Business income filers must stick to chosen regime for subsequent years (with conditions).
Is new regime default?
Yes, new regime is default from FY 2023-24 unless you opt for old regime with Form 10-IEA (business) or employer declaration (salaried).
Do investors need old regime?
Only if deductions (80C, 80D, HRA, home loan interest) exceed the slab benefit of new regime. Calculate both — don't assume.
Disclaimer: This guide is for educational purposes only. Not SEBI-registered investment advice. Consult a qualified advisor before making financial decisions.