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Old vs new tax regime — FY 2026-27

Enter your salary and the deductions you could actually claim. Both regimes are computed on this year's slabs, side by side — and if the new regime wins, you'll see exactly how far the old one is from catching up.

FY 2026-27 (AY 2027-28) slabs · Section 87A rebate, surcharge and 4% cess applied · runs entirely in your browser.

The NEW regime is cheaper for you
by ₹1,63,800 this year
New regime — tax
₹0
Old regime — tax
₹1,63,800
New taxable income
₹11,25,000
Old taxable income
₹11,50,000
The old regime would need about ₹6,50,000 MORE in deductions than you entered before it broke even.
See both regimes on your real numbers →

The landmarks that decide most cases

  • ₹12.75 lakh of salary = zero tax under the new regime. The ₹75,000 standard deduction brings taxable income to ₹12,00,000, and the Section 87A rebate (up to ₹60,000) wipes the tax entirely. Just past that cliff, tax jumps sharply — the rebate vanishes as a block, not gradually.
  • The old regime only wins on big deductions. Its slabs are harsher (20% starts at ₹5,00,001 of taxable income), so it needs serious deductions — 80C, HRA, home-loan interest — to overcome the new regime's head start.
  • Both regimes are computed fresh each year. Salaried taxpayers can switch at filing time, so the right answer is whichever is cheaper THIS year, not loyalty to either.

The stale advice still doing the rounds

You'll still find articles claiming the old regime wins once deductions cross "₹3.5–4 lakh." That figure predates the current slabs and is simply wrong now. With the ₹12 lakh rebate ceiling and the larger standard deduction, the break-even sits far higher — at a ₹15 lakh salary the old regime needs roughly ₹6 lakh of deductions before it draws level. And below about ₹12.75 lakh of salary the old regime cannot win at all: the new regime's tax is already zero, and there is nothing left to beat.

What that means in practice: if you earn under ₹12.75L, stop optimising — take the new regime and invest for returns, not for 80C. Above it, add up your real deductions honestly before committing to old-regime instruments you'd otherwise not choose.

The deduction people forget to count properly

Home-loan interest under Section 24b is capped at ₹2,00,000 for a self-occupied house — and it's the deduction people most often estimate from memory. The interest falling in a financial year comes off your amortisation schedule, not off 12 × EMI. If you're weighing a prepayment, the prepay-vs-invest calculator shows how the cap changes that decision too.