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Old vs new tax regime: which is better for me?
Updated · CardKhoj Editorial Team
Short answer
The new tax regime is better for most people. It has lower slab rates, a ₹75,000 standard deduction for salaried taxpayers, and no tax on income up to ₹12 lakh (₹12.75 lakh for salaried) thanks to the rebate. The old regime wins only if you claim large deductions — typically ₹4 lakh or more through HRA, home loan interest, 80C and 80D.
New regime slabs (from FY 2025-26)
| Income | Tax rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4–8 lakh | 5% |
| ₹8–12 lakh | 10% |
| ₹12–16 lakh | 15% |
| ₹16–20 lakh | 20% |
| ₹20–24 lakh | 25% |
| Above ₹24 lakh | 30% |
A rebate makes the tax nil if taxable income is up to ₹12 lakh. Cess of 4% applies on top.
When the old regime can still win
- You pay high rent and receive HRA.
- You pay home loan interest on a self-occupied house (up to ₹2 lakh deduction).
- You fully use 80C (₹1.5 lakh), 80D and the extra ₹50,000 NPS deduction.
How to decide
Add up all deductions you genuinely claim. If the total is small, choose the new regime. Salaried taxpayers can switch every year when filing their return; people with business income have limited switching options. Check the latest Budget, as slabs can change.
This answer is general information, not personalised financial or tax advice. Rules, rates and limits change — confirm with your bank, the RBI or a qualified adviser before making decisions.