Old vs New Tax Regime Calculator 2025-26 | Paisa Planner

Old vs New Tax Regime Calculator

With the introduction of the revised New Tax Regime in the recent Union Budget, deciding between the Old and New tax systems has become crucial for salaried employees. Use this calculator to input your gross salary and deductions (80C, HRA, NPS, etc.) to definitively see which regime minimizes your tax liability.

The New Tax Regime (Default)

The New Tax Regime offers lower tax rates and a significantly higher rebate limit under Section 87A (tax-free up to ₹12 Lakhs). It also includes a ₹75,000 standard deduction for salaried individuals. However, it requires you to forego almost all other deductions and exemptions like HRA, LTA, 80C, 80D, and home loan interest.

The Old Tax Regime

The Old Tax Regime has higher tax rates but allows you to claim a wide variety of tax deductions. If you have significant investments in PPF/ELSS (80C), pay high rent (HRA), have health insurance (80D), or pay home loan EMIs, the Old Regime might still be more beneficial for you.

Frequently Asked Questions

Which regime is better for a salary of 15 Lakhs?

It entirely depends on your deductions. Under the New Regime, a ₹15 Lakh salary (after ₹75,000 standard deduction) incurs some tax. However, if you claim ₹1.5L in 80C, ₹50k in NPS, ₹2L in Home Loan Interest, and a substantial HRA under the Old Regime, your taxable income could drop below ₹10L or even ₹5L, making the Old Regime much more profitable. Use the calculator above to find your break-even point.

Can I switch between the Old and New Tax Regime every year?

If you are a salaried individual with no business income, you can switch between the Old and New Tax Regime every year when filing your ITR. However, if you have income from a business or profession, you only get one chance to switch back to the Old Regime.

Is Standard Deduction available in both regimes?

Yes. A standard deduction of ₹50,000 is available in the Old Regime. In the New Regime, the standard deduction has been increased to ₹75,000 for salaried employees and pensioners.