Old vs new tax regime in India (FY 2025-26): which actually wins
This used to be a simple question — max out your 80C and the old regime usually won. After Budget 2025 restructured the new regime's slabs and rebate, that's no longer true for a large share of salaried India. Here's the actual math, not the general advice.
The FY 2025-26 new-regime slabs
No deductions to track — just a standard deduction of ₹75,000, then these slabs on what's left:
- ₹0 – 4L: 0%
- ₹4L – 8L: 5%
- ₹8L – 12L: 10%
- ₹12L – 16L: 15%
- ₹16L – 20L: 20%
- ₹20L – 24L: 25%
- Above ₹24L: 30%
The old regime still has a job — if you have the deductions to fill it
The old regime keeps its ₹50,000 standard deduction plus everything you can actually document: Section 80C (up to ₹1.5L — PPF, ELSS, EPF, life insurance), 80D health insurance, HRA exemption, and home loan interest. It only wins once those add up to enough to offset its higher slab rates and 87A rebate ceiling of just ₹5 lakh.
A worked comparison at ₹15L gross
Take someone earning ₹15 lakh a year, paying rent in a metro (HRA exemption ₹1.2L), maxing 80C (₹1.5L), claiming 80D (₹25,000), and paying ₹2L in home loan interest:
Even with a genuinely full deduction stack — HRA, 80C, 80D, and home loan interest all claimed — the new regime still comes out about ₹10,000 cheaper at this income. That's the real shift from Budget 2025: it now takes a heavier deduction load than most people actually have to make the old regime win.
When old regime still wins
The old regime tends to win when you're stacking most of these at once: the full ₹2 lakh home loan interest cap (Section 24(b), self-occupied property), a maxed-out ₹1.5 lakh 80C, 80D, and a meaningful HRA exemption on top — typically higher incomes with an active home loan and dependents. Below that, or with only one or two deductions claimed, the new regime usually wins. The gap is close enough now that it's worth running your own numbers rather than assuming either answer.