What is the ₹12L tax-free threshold in new regime?

Union Budget 2025 raised the Section 87A rebate threshold under the new regime to ₹12,00,000 of taxable income with a maximum rebate of ₹60,000. For a salaried taxpayer, that means zero tax up to ₹12,75,000 of gross income after the ₹75,000 standard deduction. The rebate disappears the moment taxable income crosses ₹12L (subject to marginal relief in the new regime, which caps the tax cliff between ₹12L and ~₹12.75L). This change made the new regime dominant for most middle-income salaried taxpayers.

Can I switch between regimes?

For salaried individuals (no business income), the regime can be switched every year while filing the return — you simply opt out of the new regime via Form 10-IEA. For those with business or professional income, the rules are stricter: once you opt out of the new regime, you can return to it only once in your lifetime (with conditions). From FY 2023-24, the new regime is the DEFAULT — if you do nothing, your tax is computed under the new regime.

What deductions are NOT available in new regime?

Under the new regime (Section 115BAC), most popular itemised deductions are unavailable: 80C (PPF, ELSS, life insurance, EPF own contribution above the auto-applied portion), 80CCD(1B) NPS extra ₹50K, 80D health insurance, 80E education loan interest, 80G donations, Section 24(b) home loan interest on self-occupied property (₹2L cap), HRA exemption u/s 10(13A), LTA, leave encashment beyond statutory cap, food coupons, and several minor exemptions. What IS available under new regime: standard deduction ₹75K (salaried/pensioner), 80CCD(2) employer NPS contribution up to 14% of basic (vs 10% in old regime), and EPF employer contribution.

Is HRA available in new regime?

No. HRA exemption under Section 10(13A) is unavailable in the new regime. If a substantial portion of your salary is HRA and you actually pay rent, the lost HRA exemption is often the single biggest reason the old regime ends up cheaper. To check: compute your HRA exemption (use a dedicated HRA Calculator), then add it to the deduction stack above — if old-regime total deductions clear the break-even shown by this calculator, the old regime wins.

Old vs New Regime Calculator FY 2026-27

Old vs New Regime

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Old vs New Regime Tax Calculator

Compare income tax under old regime (with 80C / 80D / HRA / home loan deductions) vs new regime (FY 2026-27 slabs with ₹12L tax-free threshold, ₹60K rebate u/s 87A). Shows side-by-side tax + which regime saves more for your specific deduction profile.

Reviewed by the CalculatorKosh Editorial TeamUpdated June 2026Free · No sign-up

Income

Gross salary

₹

₹0₹10 Cr

Annual CTC / salary before any deductions

Other income

₹

₹0₹10 Cr

Interest, rental, capital gains (net)

Salaried?

Deductions (only used for old regime)

80C investments

₹

₹0₹1.5 L

Cap ₹1,50,000

80CCD(1B) NPS extra

₹

₹0₹50 K

Cap ₹50,000

80D health insurance

₹

₹0₹25 K

Cap ₹25,000

24(b) home loan interest

₹

₹0₹2 L

Cap ₹2,00,000 (self-occupied)

HRA exemption

₹

₹0₹1000 Cr

LTA exemption

₹

₹0₹1000 Cr

Other deductions

₹

₹0₹1000 Cr

80E / 80G / etc.

Old regime saves

₹3,900

(Old: ₹1,01,400 · New: ₹1,05,300)

Old regime tax

₹1.0 L

New regime tax

₹1.1 L

Savings

₹3,900

Better regime

Old regime

Side-by-side comparison

Line item	Old ✓	New
Gross income	₹15,50,000	₹15,50,000
Standard deduction	− ₹50,000	− ₹75,000
Other deductions	− ₹5,75,000	—
Taxable income	₹9,25,000	₹14,75,000
Slab tax	₹97,500	₹1,01,250
− 87A rebate	− ₹0	− ₹0
+ 4% cess	+ ₹3,900	+ ₹4,050
FINAL TAX	₹1,01,400	₹1,05,300

BREAK-EVEN

The cross-over point

Break-even deduction = ₹6,06,251. If you have less than this in total old-regime deductions, new regime is better; more than this, old regime wins.

Your current old-regime total deduction is ₹6,25,000 — above the break-even.

IMPORTANT

Default to new regime

From FY 2023-24, the new regime is the DEFAULT. You must explicitly opt for old regime in your ITR (Form 10-IEA for salaried). The ₹12L zero-tax threshold under new regime (post-Budget 2025) made it dominant for most salaried; check the comparison before filing.

Related calculators

Income Tax Calculator

Full slab-by-slab breakdown with surcharge for incomes above ₹50L.

87A Rebate Calculator

Marginal relief modelling for incomes just over the ₹12L threshold.

HRA Calculator

Compute HRA exemption to plug into the old-regime deduction stack.

Old vs New — total tax payable

How It Works

This calculator computes your annual income tax under both the old and new tax regimes side-by-side for FY 2026-27 (AY 2027-28) and shows which regime saves more for your specific deduction profile. The new regime under Section 115BAC is the default from FY 2023-24; the old regime requires explicit opt-out via Form 10-IEA for salaried taxpayers.

Key differences

The new regime has lower slab rates and a much higher Section 87A rebate (full rebate up to ₹12L taxable income, capped at ₹60K), but allows almost no itemised deductions — only the ₹75,000 standard deduction (salaried) and the employer NPS contribution u/s 80CCD(2) up to 14% of basic. The old regime uses higher slab rates and a lower ₹50,000 standard deduction, but lets you claim 80C (up to ₹1.5L), 80CCD(1B) (₹50K NPS extra), 80D (₹25K health), 24(b) (₹2L home loan interest), HRA, LTA, and other deductions.

The break-even rule

The break-even deduction depends on your gross income. At ₹15L gross salary, you typically need ₹4-6L of total deductions for the old regime to win; below that, the new regime saves more. This calculator computes the exact break-even for your inputs so you can see how much you would need to deduct to make switching worthwhile.

What this calculator simplifies

Surcharge (applicable above ₹50L) is intentionally out of scope here — use the full Income Tax Calculator for high-income surcharge modelling. The 80D cap is fixed at ₹25K (regular taxpayer); senior-citizen ₹50K bucket is not modelled.

Frequently Asked Questions

It depends on how much you actually deduct. The new regime has lower slab rates and a zero-tax band up to ₹12L taxable income (₹12.75L gross for salaried). The old regime offers itemised deductions (80C up to ₹1.5L, 80D up to ₹25K, 80CCD(1B) NPS up to ₹50K, 24(b) home loan interest up to ₹2L, HRA, LTA) that can knock taxable income down sharply. Rule of thumb at ₹15L gross: if your combined deductions clear roughly ₹4-6L the old regime usually wins, otherwise the new regime wins. The break-even depends on income level — at higher incomes the new regime's lower rates often beat even maximum old-regime deductions.