Salary
Old or new tax regime: which one fits you
There is no universal answer, only a break-even point that depends on how much you can actually claim.
By the CALQEVA editorial team1 min read
The trade-off in one sentence
The new regime gives you wider slabs, lower rates and a higher rebate threshold, but removes almost every exemption and deduction. The old regime charges more on the same income but lets you reduce that income first.
Work out your break-even
The question is how much you can legitimately deduct under the old regime. Add up your HRA exemption, Section 80C investments including your own PF contribution, 80D health insurance premiums, home loan interest and anything else you genuinely claim.
Below a certain total, the new regime's lower rates win. Above it, the old regime does. Rather than memorising a threshold, enter your actual figures in the income tax calculator: it works out both regimes side by side and shows the exact break-even deduction amount for your salary.
Who tends to benefit from each
People with a home loan, significant rent in a metro, and a fully used 80C limit often still come out ahead under the old regime. People early in their careers, living with family, or without large deductions usually pay less under the new one.
Practical points
Salaried employees can generally choose between regimes each year when filing. Your employer deducts TDS based on what you declare at the start of the year, so declaring accurately avoids either a large refund or a shortfall later.
Keep proof of every deduction you claim. The old regime's advantage disappears entirely if a claim is disallowed.
Try it with your own numbers
- Income Tax CalculatorNewOld vs new tax regime side by side, with HRA, 80C, 80D and home loan, so you can see which saves more.
- Salary CalculatorTrendingCTC to monthly in-hand salary after PF, professional tax and income tax.
- Rent Receipt GeneratorNewMonthly rent receipts for your HRA claim, a whole year in one PDF. With landlord PAN and amount in words.
Keep reading
- Zero income tax up to ₹12.75 lakh: how the new regime rebate worksWhy a salary of ₹12.75 lakh pays no tax in the new regime, how marginal relief works just above it, and what income the rebate does not cover.
- How to claim HRA: rent receipts, landlord PAN and the exemptionHow the HRA exemption is worked out, the eight metro cities at 50%, when your landlord's PAN is needed, and what to give your employer as proof.