Tax Regime Comparison Calculator
Compare old and new tax regimes for FY 2025-26. Find out which regime saves you the most tax and calculate your exact in-hand salary with latest tax slabs.
New Option: Since FY 2023-24, the new tax regime is the default for individuals. You can opt for old regime if it saves tax, but you lose most deductions.
Not applicable to new tax regime
✓ NEW TAX REGIME is better for you
Save ₹23,400 with New Regime
Your in-hand salary would be ₹9,66,200(+₹23,400)
| Parameter | New Regime | Old Regime |
|---|---|---|
| Gross Income | ₹10,00,000 | ₹10,00,000 |
| Standard Deduction | ₹75,000 | ₹50,000 |
| Other Deductions | - | ₹1,50,000 |
| Taxable Income | ₹9,25,000 | ₹8,00,000 |
| Income Tax (+ 4% cess) | ₹33,800 | ₹57,200 |
| In-Hand Salary | ₹9,66,200 | ₹9,42,800 |
New Tax Regime (FY 2024-25)
Standard Deduction₹75,000
Slab Rates:
- ₹0 - ₹4,00,000: 0%
- ₹4,00,001 - ₹8,00,000: 5%
- ₹8,00,001 - ₹12,00,000: 10%
- ₹12,00,001 - ₹16,00,000: 15%
- ₹16,00,001 - ₹20,00,000: 20%
- ₹20,00,001+: 30%
+ 4% education cess on tax
Old Tax Regime
Standard Deduction₹50,000
Benefits:
- ✓ Section 80C (₹1,50,000)
- ✓ HRA/Rent deduction
- ✓ Medical insurance
- ✓ Education loan interest
- ✓ Home loan interest
+ 4% education cess on tax
Understanding Tax Regimes
The Indian income tax system offers individuals a choice between two tax regimes: the traditional "Old Tax Regime" and the newer "New Tax Regime" introduced in FY 2020-21. The choice between these regimes significantly impacts your tax liability. Making the right choice can save you thousands of rupees annually.
New Tax Regime (Default from FY 2023-24)
- Lower tax rates: More progressive with lower rates at lower income brackets.
- Higher standard deduction: ₹75,000 (vs ₹50,000 in old regime).
- No deductions: Cannot claim 80C, HRA, medical insurance, education loan interest, etc.
- Simpler: Easier to calculate and file tax returns.
- Best for: People with low deductions, salaried employees without major investments.
Old Tax Regime (Available for Opted Individuals)
- Higher tax rates: Slightly higher slab rates compared to new regime.
- Multiple deductions: 80C (₹1.5L), HRA, medical insurance, education loan interest, etc.
- Home loan benefit: Deduct principal repayment and interest separately.
- Investment-friendly: Deductions for investments like LIC, PPF, ELSS, etc.
- Best for: High earners with significant deductions, home loan borrowers.
Key Deductions in Old Regime
| Deduction | Section | Limit |
|---|---|---|
| Life Insurance, PF, PPF, ELSS | 80C | ₹1,50,000 |
| Medical Insurance Premium | 80D | ₹1,00,000 |
| Education Loan Interest | 80E | No limit |
| Housing Loan Interest | 24(b) | ₹2,00,000 |
| Housing Loan Principal | 80EEA | ₹1,50,000 |
Who Should Choose Which Regime?
Choose NEW Regime if:
- You have minimal deductions
- No home loan
- Salary is below ₹50 lakhs
- Prefer simplicity
Choose OLD Regime if:
- You have a home loan
- You invest in 80C schemes
- You have medical insurance
- Calculate and verify it saves tax
Important Notes
- Opt-out: From FY 2023-24, new regime is default. You must actively opt for old regime to claim deductions.
- Year-to-year: You can switch between regimes every financial year.
- Calculate carefully: Use the calculator to compare both and choose the better option.
- Corporate employees: Salary structure and deductions affect the choice significantly.
Tax Saving Tips
If choosing Old Regime:
- Max out 80C (₹1,50,000) with LIC, PPF, ELSS
- Claim HRA if paying rent
- Don't forget medical insurance (80D)
- If home loan owner, claim interest and principal deductions
Investment Ideas for 80C:
- PPF - Safe, tax-free returns
- ELSS - Tax-saving mutual funds
- Life Insurance - Protection + deduction
- NPS - Long-term retirement planning
FAQ
Can I switch between tax regimes every year?▼
Yes, you can switch between regimes every financial year. However, if you opt for new regime in any year, you cannot switch back for that same year. Choose wisely based on your situation.
Is new tax regime really better?▼
Not always. It depends on your individual circumstances. If you have significant deductions (home loan, investments, insurance), old regime might be better. Use the calculator to compare.
What if I am not sure which to choose?▼
Use this calculator to compare both scenarios with your actual figures. The difference can be substantial, so it's worth spending time to calculate accurately.
Can I claim deductions in new regime?▼
No. New regime doesn't allow any personal deductions. You only get the standard deduction of ₹75,000. This is the main trade-off.
Is the home loan interest deduction lost in new regime?▼
Yes. In new regime, you cannot claim home loan interest or principal deduction. This makes old regime more attractive if you have a significant home loan.
Disclaimer: This calculator provides estimates based on current tax laws for FY 2024-25. Tax laws change frequently. Always consult with a qualified CA or tax professional for personalized tax advice. This is for informational purposes only, not professional tax advice.