Old vs New Tax Regime
Since FY 2023-24, the new tax regime is the default. Here's exactly how the two compare, and a calculator to check which works out cheaper for your income.
Better Choice
Saves you ₹1,17,000/year
| New | Old | |
|---|---|---|
| Standard deduction | ₹75,000 | ₹50,000 |
| Taxable income | ₹11,25,000 | ₹10,00,000 |
| Tax payable | ₹0 | ₹1,17,000 |
Slab Rates Side by Side
New Regime
- ₹0 – ₹4,00,000: 0%
- ₹4,00,000 – ₹8,00,000: 5%
- ₹8,00,000 – ₹12,00,000: 10%
- ₹12,00,000 – ₹16,00,000: 15%
- ₹16,00,000 – ₹20,00,000: 20%
- ₹20,00,000 – ₹24,00,000: 25%
- ₹24,00,000 – above: 30%
Standard deduction: ₹75,000 · Rebate up to ₹12,00,000 taxable income
Old Regime
- ₹0 – ₹2,50,000: 0%
- ₹2,50,000 – ₹5,00,000: 5%
- ₹5,00,000 – ₹10,00,000: 20%
- ₹10,00,000 – above: 30%
Standard deduction: ₹50,000 · Rebate up to ₹5,00,000 taxable income
What the New Regime Gives Up
The new regime offers lower slab rates and a higher standard deduction, but in exchange you lose almost every deduction and exemption available under the old regime — HRA exemption, Section 80C investments (PPF, ELSS, life insurance premiums), home loan interest deduction, and most others. If your old-regime deductions are large enough, the old regime can still work out cheaper despite its higher slab rates, which is why this isn't a one-size-fits-all decision.
Who Tends to Benefit From Each
The new regime tends to suit people with few deductions to claim — for example, those without a home loan, who don't pay significant rent, or who haven't invested heavily in 80C instruments. The old regime tends to suit people who can stack multiple deductions: HRA exemption plus 80C investments plus home loan interest can add up to a large enough reduction in taxable income to outweigh the new regime's lower slab rates.