The new tax regime now has a ₹75,000 standard deduction for salaried employees — and zero tax up to ₹12.75 lakh income. But the old regime still wins if you have big deductions. Here's the exact math for every salary level.
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The Union Budget 2024 made the new tax regime more attractive with two key changes:
Standard deduction in new tax regime = ₹75,000 (up from ₹50,000). Standard deduction in old tax regime = ₹50,000 (unchanged). This alone makes the new regime ₹2,500 better than before for salaried employees.
Standard deduction is a flat deduction from salary income — no bills, no proof required. It's automatically applied when you file your ITR.
| Category | New Regime | Old Regime |
|---|---|---|
| Salaried employees | ₹75,000 | ₹50,000 |
| Pensioners | ₹25,000 | ₹50,000 |
| Family pension receivers | ₹25,000 | ₹15,000 |
| Proof required? | No | No |
| Form to submit? | None | None |
💡 For a salaried person earning ₹50,000/month (₹6L CTC): Standard deduction of ₹75,000 in new regime means taxable income is ₹5,25,000. With 87A rebate, zero tax payable. The old regime gives only ₹50,000 deduction but taxable income is still ₹5,50,000 — also zero tax with 87A.
Below is the actual tax payable under both regimes for salaried employees in FY 2025-26. New regime numbers include the ₹75,000 standard deduction. Old regime includes only standard deduction of ₹50,000 with no other deductions.
| Annual CTC | New Regime Tax | Old Regime Tax* | Difference |
|---|---|---|---|
| ₹5,00,000 | ₹0 | ₹0 | Equal |
| ₹6,00,000 | ₹0 | ₹0 | Equal |
| ₹7,50,000 | ₹0 | ₹13,000 | New saves ₹13,000 |
| ₹8,00,000 | ₹0 | ₹23,400 | New saves ₹23,400 |
| ₹10,00,000 | ₹54,600 | ₹1,17,000 | New saves ₹62,400 |
| ₹12,00,000 | ₹83,200 | ₹1,87,200 | New saves ₹1,04,000 |
| ₹15,00,000 | ₹1,45,600 | ₹2,34,000 | New saves ₹88,400 |
| ₹20,00,000 | ₹2,96,400 | ₹3,51,000 | New saves ₹54,600 |
| ₹30,00,000 | ₹5,98,000 | ₹6,63,000 | New saves ₹65,000 |
*Old regime with only standard deduction ₹50,000. No 80C, HRA or other deductions claimed.
The old regime wins when your total deductions are high enough to bring your taxable income below what the new regime charges. Here's the break-even deduction amount at every salary:
| Annual Salary | Break-Even Deductions | Common Deduction Sources |
|---|---|---|
| ₹7,50,000 | ₹75,000+ | 80C alone (₹1.5L) → Old regime wins |
| ₹10,00,000 | ₹2,50,000+ | 80C (₹1.5L) + HRA (₹60K) + 80D (₹40K) → Old wins |
| ₹12,00,000 | ₹3,00,000+ | 80C + HRA + Home loan interest needed |
| ₹15,00,000 | ₹3,50,000+ | 80C + HRA + Home loan interest + 80D |
| ₹20,00,000 | ₹2,50,000+ | 80C + Home loan interest → Old wins |
You pay rent and claim HRA + invest ₹1.5L in 80C (PPF, ELSS, LIC) + pay home loan interest + have health insurance (80D). If total deductions exceed ₹2.5–3.5 lakh depending on salary, old regime saves more.
You live in your own house (no HRA), have no major investments, don't pay home loan interest, or your company provides good NPS contribution. Also if you want simplicity — fewer forms, fewer proofs, fewer calculations.
Most deductions are not available in the new regime. Here's what you can and cannot claim:
| Deduction | New Regime | Old Regime |
|---|---|---|
| Standard Deduction (Salary) | ✅ ₹75,000 | ✅ ₹50,000 |
| Section 80C (PPF, ELSS, LIC) | ❌ Not available | ✅ Up to ₹1,50,000 |
| HRA Exemption | ❌ Not available | ✅ Actual HRA received |
| Home Loan Interest (24b) | ❌ Not available | ✅ Up to ₹2,00,000 |
| Section 80D (Health Insurance) | ❌ Not available | ✅ Up to ₹25,000–₹50,000 |
| NPS Employer Contribution 80CCD(2) | ✅ Available | ✅ Available |
| Leave Travel Allowance (LTA) | ❌ Not available | ✅ Available |
| Section 80TTA (Savings interest) | ❌ Not available | ✅ Up to ₹10,000 |
| Item | New Regime | Old Regime |
|---|---|---|
| Gross Salary | ₹10,00,000 | ₹10,00,000 |
| Standard Deduction | ₹75,000 | ₹50,000 |
| 80C Deduction | ₹0 | ₹1,50,000 |
| Taxable Income | ₹9,25,000 | ₹8,00,000 |
| Tax Payable | ₹54,600 | ₹75,400 |
| Winner | New Regime | — |
| Item | New Regime | Old Regime |
|---|---|---|
| Gross Salary | ₹10,00,000 | ₹10,00,000 |
| Standard Deduction | ₹75,000 | ₹50,000 |
| HRA Exemption | ₹0 | ₹1,20,000 |
| 80C | ₹0 | ₹1,50,000 |
| 80D | ₹0 | ₹25,000 |
| Taxable Income | ₹9,25,000 | ₹5,55,000 |
| Tax Payable | ₹54,600 | ₹28,600 |
| Winner | — | Old Regime saves ₹26,000 |
Enter your exact salary and deductions to find which regime saves you more.
Calculate My Tax FY 2025-26 →Add up all your deductions: Standard deduction + 80C + HRA + Home loan interest + 80D + others. If total exceeds ₹3,75,000 for ₹10L salary (or ₹4,25,000 for ₹15L salary) — old regime wins. Otherwise, new regime is better.
This article is for educational purposes based on publicly available tax information for FY 2025-26. Tax laws can change. Please consult a chartered accountant for personalised tax advice.