The Two Regimes in One Minute
The new regime has lower slab rates (nil up to ₹4 lakh, then 5% steps up to 30% above ₹24 lakh), a ₹75,000 standard deduction and a rebate that makes taxable income up to ₹12 lakh tax-free. It allows almost no other deductions.
The old regime has higher rates (5% from ₹2.5 lakh, 20% from ₹5 lakh, 30% from ₹10 lakh) and a ₹50,000 standard deduction, but allows HRA exemption, 80C (₹1.5 lakh), 80D health insurance, home loan interest (₹2 lakh), NPS under 80CCD(1B) (₹50,000) and more.
Tax at Different Salaries
The table compares the new regime with an old-regime taxpayer who claims a fairly typical ₹2.25 lakh of deductions (80C ₹1.5 lakh + 80D ₹25,000 + NPS ₹50,000). All figures include 4% cess.
| Salary | New regime tax | Old regime tax (₹2.25 lakh deductions) | Old regime wins only if deductions exceed* |
|---|---|---|---|
| ₹10,00,000 | ₹0 | ₹59,800 | ₹4,50,000 |
| ₹12,75,000 | ₹0 | ₹1,17,000 | ₹7,25,000 |
| ₹15,00,000 | ₹97,500 | ₹1,87,200 | ₹5,43,750 |
| ₹20,00,000 | ₹1,92,400 | ₹3,43,200 | ₹7,08,333 |
| ₹25,00,000 | ₹3,19,800 | ₹4,99,200 | ₹8,00,000 |
| ₹30,00,000 | ₹4,75,800 | ₹6,55,200 | ₹8,00,000 |
*Total old-regime deductions and exemptions in addition to the ₹50,000 standard deduction — HRA exemption, 80C, 80D, home loan interest, NPS and so on.
When the Old Regime Still Wins
Take a ₹20 lakh salary with an HRA exemption of ₹3 lakh, 80C ₹1.5 lakh, 80D ₹25,000, NPS ₹50,000 and home loan interest ₹2 lakh — ₹7.25 lakh in total. Old-regime taxable income is ₹12.25 lakh and tax is ₹1,87,200. The new regime would charge ₹1,92,400, so the old regime saves ₹5,200. Remove the home loan and the new regime wins comfortably.
Things the Table Does Not Show
- Employer NPS (80CCD(2)) is allowed in both regimes — up to 14% of basic + DA in the new regime — so it does not change the comparison much.
- Salaried employees can switch every year when filing their return. People with business income can switch back to the old regime only once.
- Tell your employer which regime you want at the start of the year so monthly TDS is right.
Frequently Asked Questions
Is the new tax regime better for a ₹15 lakh salary?
Usually yes. New-regime tax is ₹97,500. The old regime is cheaper only if your deductions and exemptions, beyond the ₹50,000 standard deduction, exceed about ₹5.44 lakh.
Which regime is better for ₹10 lakh salary?
The new regime — tax is zero because taxable income after the ₹75,000 standard deduction is below ₹12 lakh. The old regime would need ₹4.5 lakh of deductions just to reach zero tax.
Can I change my tax regime every year?
Salaried individuals without business income can choose either regime every year when filing the return. Those with business income have limited switching.
Is HRA allowed in the new regime?
No. HRA exemption, 80C, 80D and home loan interest on a self-occupied house are only available in the old regime.
This guide explains general rules for educational purposes and reflects the law as reviewed in October 2026. It is not tax or legal advice. For your own situation, please consult a Chartered Accountant or the official Income Tax Department and GST portals.