New vs old tax regime in India, FY 2026-27: which leaves more in hand

Rates checked 2 November 2026 · Go Home Early

Since the Income-tax Act, 2025 came into effect on 1 April 2026, the new regime is the default under section 202 and the old regime is something you opt into. Both are still in use for the 2026-27 financial year (assessment year 2027-28). The Finance Bill 2026 memorandum proposes no change in the rates, so the slabs below are the ones already enacted. This guide compares the two on one CTC and then asks the question that matters: how much do you have to claim before the old regime wins.

The two sets of slabs

The new regime allows a standard deduction of ₹75,000 and a rebate of up to ₹60,000 when taxable income is not above ₹12,00,000. The old regime allows ₹50,000 and a rebate of up to ₹12,500 up to ₹5,00,000 of taxable income, but also lets you subtract deductions such as 80C (limit ₹1,50,000), 80CCD(1B) (₹50,000), home loan interest on a self-occupied house (₹2,00,000) and exemptions such as HRA. Both regimes add 4% Health and Education Cess.

One CTC of ₹15,00,000, five ways to claim

Take a CTC of ₹15,00,000 with basic pay at 50% of it. The employee EPF is ₹90,000 a year and the employer pays the same inside the CTC, so the gross salary is ₹14,10,000. Under the new regime the taxable income is ₹13,35,000 and the tax is ₹83,460 with cess. The old regime depends on what you claim.

Even with every item above claimed, the old regime tax of ₹87,880 stays above ₹83,460 under the new regime.

How much you need to claim before the old regime wins

This table keeps the EPF as the only 80C item and finds the smallest extra amount of deductions or exemptions, on top of the EPF, that brings the old regime tax down to the new regime tax. It uses a CTC with basic pay at 50%, so the EPF is the same under both regimes.

At ₹8,00,000 the new regime tax is ₹0, because the rebate removes it, so the old regime would need ₹1,54,000 of further deductions to match. At ₹30,00,000 the gap is wider: the old regime needs ₹6,49,999 on top of the EPF, which is ₹7,99,999 of deductions in all. The ₹1,50,000, ₹50,000 and ₹2,00,000 caps add up to ₹4,00,000, so anything above that has to come from exemptions such as HRA or other deductions.

What the comparison leaves out

Employer NPS contributions, meal vouchers, HRA calculations, LTA, perquisites, a bonus, income other than salary, and a person aged 60 or more are not in these numbers. Enter what you can claim as one amount in the calculator and compare the two regimes on your own figures. Which regime applies is a choice you make, and how and when it can be changed is explained on the Income Tax Department site.

Sources

• Ministry of Finance: Memorandum explaining the Finance Bill 2026 (rates for 2026-27 under section 202 and the First Schedule)
• Income Tax Department e-filing portal: slabs, rebate, surcharge, cess and deduction limits
• PIB: Budget 2025-26, new regime slabs, standard deduction and the Rs 12.75 lakh figure
• Ministry of Labour: Employees' Provident Fund Scheme (12% of wages)
• Every rate used, with its source and check date: Sources and rates

This calculator is general information only. It uses the Income Tax Department, Ministry of Finance and EPFO pages listed on the Sources page, and your payslip, your employer's tax deducted at source and your personal situation may differ. Rates as at 2 November 2026.

Figures worked out from the official pages by the operator, who has run payroll for a small team firsthand. About: /in/about/