Old vs New Tax Regime Calculator

Old vs new tax regime — which one actually saves you money?

Since the new tax regime became the default under Indian income tax law, most salaried employees have to actively compare both regimes rather than assume one is automatically better. The two structures trade off differently: the new regime offers lower slab rates and a rebate that brings tax to zero for taxable income up to ₹12,00,000, but it doesn't let you claim HRA exemption, Section 80C investments, or Section 80D health insurance premiums. The old regime keeps higher slab rates but allows all of those deductions.

In practice, this means the old regime tends to win for people with significant deductions to claim — high rent in a metro city, a full ₹1,50,000 in 80C investments (PPF, ELSS, life insurance premiums), and health insurance premiums under 80D. The new regime tends to win for people with few or no such deductions, especially at lower and middle income levels where the new regime's rebate zeroes out tax entirely.

There isn't a single income threshold where one regime universally wins — it depends on your specific deductions, not just your CTC. That's why this calculator runs your actual numbers through both regimes rather than giving a general rule of thumb. If your deductions change year to year (for example, you stop paying rent, or your 80C investments lapse), it's worth re-running this comparison rather than sticking with whichever regime worked out better last year.

One thing to note: salaried employees in India can generally switch between the old and new regime each financial year when filing returns (this flexibility is more restricted for business/professional income under Section 44ADA). That means this isn't a one-time, irreversible decision — it's worth checking every year, especially if your rent, investments, or income change.