Which tax regime is better for salaried employees?

It depends on your total deductions. If you have significant deductions under 80C, 80D, HRA, home loan interest and NPS (typically above ₹3–4 lakh for higher incomes), the old regime often saves more tax. If your deductions are low, the new regime's lower slab rates and higher rebate (no tax up to ₹12 lakh taxable income for FY 2025-26) generally win. Use this calculator to compare your specific situation.

Can I switch between old and new tax regimes every year?

Salaried individuals and pensioners without business income can switch between the old and new regime every financial year when filing their ITR. However, if you have income from business or profession, you can switch only once from old to new regime (and back once). Confirm your eligibility with a CA before switching.

Is HRA exemption available under the new tax regime?

No. HRA exemption under Section 10(13A) is not available if you opt for the new tax regime. Similarly, deductions under Chapter VIA (80C, 80D, 80E, etc.) and loss from house property are not claimable under the new regime. Only the standard deduction (₹75,000 for FY 2025-26) and employer NPS contribution (Section 80CCD(2)) are allowed.

What is Section 87A rebate under the new regime?

Under the new regime for FY 2025-26, if your total taxable income does not exceed ₹12 lakh, you are entitled to a full tax rebate under Section 87A — meaning your effective income tax payable is zero (before cess). This effectively means no tax up to ₹12 lakh of taxable income under the new regime. Always verify the current rebate limit at incometax.gov.in as it can change with each budget.

Old vs New Tax Regime Calculator 2025-26

Compare your income tax liability under the old and new regime for FY 2025-26. Enter your salary and deductions to see which regime saves you more tax.

Disclaimer: This tool provides an approximate comparison only. Tax rates and deduction limits are subject to change. Consult a CA for accurate tax planning.

Your Income & Deductions

Income

Annual Gross Salary (₹)

Old Regime Deductions

These deductions apply only under the old regime. Leave as 0 if not applicable.

HRA Received (₹/year)

Rent Paid (₹/year)

Section 80C Investments (₹) max ₹1,50,000

Section 80D Health Insurance Premium (₹) max ₹50,000

NPS Contribution 80CCD(1B) (₹) max ₹50,000

Home Loan Interest Section 24(b) (₹) max ₹2,00,000

Tax Comparison

Enter your annual gross salary to see the comparison.

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Frequently Asked Questions

Which tax regime is better for salaried employees?: It depends on your total deductions. If you have significant deductions under 80C, 80D, HRA, home loan interest and NPS (typically above ₹3–4 lakh for higher incomes), the old regime often saves more tax. If your deductions are low, the new regime's lower slab rates and higher rebate (no tax up to ₹12 lakh taxable income for FY 2025-26) generally win. Use this calculator to compare your specific situation.
Can I switch between old and new tax regimes every year?: Salaried individuals and pensioners without business income can switch between the old and new regime every financial year when filing their ITR. However, if you have income from business or profession, you can switch only once from old to new regime (and back once). Confirm your eligibility with a CA before switching.
Is HRA exemption available under the new tax regime?: No. HRA exemption under Section 10(13A) is not available if you opt for the new tax regime. Similarly, deductions under Chapter VIA (80C, 80D, 80E, etc.) and loss from house property are not claimable under the new regime. Only the standard deduction (₹75,000 for FY 2025-26) and employer NPS contribution (Section 80CCD(2)) are allowed.
What is Section 87A rebate under the new regime?: Under the new regime for FY 2025-26, if your total taxable income does not exceed ₹12 lakh, you are entitled to a full tax rebate under Section 87A — meaning your effective income tax payable is zero (before cess). This effectively means no tax up to ₹12 lakh of taxable income under the new regime. Always verify the current rebate limit at incometax.gov.in as it can change with each budget.