Loans, investing & tax
Old vs New Tax Regime FY 2026-27: Which Saves You More?
Updated 25 September 2026 · 6 min read
The new tax regime has lower slab rates but almost no deductions. The old regime has higher rates but lets you claim 80C, 80D, HRA, home loan interest and more. Which is better depends on how much you can claim — here are the real numbers for FY 2026-27 (AY 2027-28).
New regime slabs
| Taxable income | 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% |
Salaried people get a ₹75,000 standard deduction, and the Section 87A rebate makes tax zero up to ₹12 lakh of taxable income — ₹12.75 lakh of salary. The old regime has a ₹50,000 standard deduction and slabs of 5% (₹2.5–5 lakh), 20% (₹5–10 lakh) and 30% above ₹10 lakh. Both add 4% cess.
Tax at common salaries
| Salary | New regime | Old regime (80C ₹1.5L + 80D ₹25k) | Old regime (heavy deductions*) |
|---|---|---|---|
| ₹12.75 lakh | ₹0 | ₹1,32,600 | ₹44,200 |
| ₹15 lakh | ₹97,500 | ₹2,02,800 | ₹91,000 |
| ₹20 lakh | ₹1,92,400 | ₹3,58,800 | ₹2,34,000 |
| ₹30 lakh | ₹4,75,800 | ₹6,70,800 | ₹5,46,000 |
*Heavy deductions: 80C ₹1.5 lakh, 80D ₹25,000, NPS 80CCD(1B) ₹50,000, home loan interest ₹2 lakh and HRA exemption ₹1.5 lakh — ₹5.75 lakh in all. Tax includes 4% cess; resident individuals below 60.
How much do you need to claim for the old regime to win?
Roughly, the old regime only beats the new one if your total deductions (beyond the standard deduction) exceed:
- ₹5.45 lakh at a ₹15 lakh salary
- ₹7.1 lakh at ₹20 lakh
- ₹8 lakh at ₹30 lakh
Most people only reach that with a home loan and a large HRA claim. For everyone else, the new regime wins — and at ₹12.75 lakh or less, it wins outright.
Compare both regimes with your own deductionsCompare old vs. new tax regime and see which saves you more, with slab-wise breakdown.Want to see what lands in your account each month? Try the CTC to in-hand salary calculator, or read how in-hand salary is calculated.
Frequently asked questions
Up to what salary is income tax zero in the new regime?
For FY 2026-27, a salaried person pays no tax up to ₹12.75 lakh in the new regime: the ₹75,000 standard deduction brings taxable income to ₹12 lakh, and the Section 87A rebate covers the tax up to that level.
When is the old regime better?
When your deductions are large. At a ₹15 lakh salary, you need about ₹5.45 lakh of deductions (80C, 80D, HRA, home loan interest and so on) before the old regime beats the new one.
Can I switch regimes every year?
Salaried people without business income can choose either regime each year when filing their return. Those with business income have limited chances to switch back.