New regime vs old regime: how to choose
1 min read
Updated 03 Oct 2026
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AI summary
What each regime allows, a simple break-even rule, and how often you can switch.
4 sections
What the new regime allows
- Standard deduction of ₹75,000 (salary/pension) and ₹25,000 on family pension
- Employer's NPS contribution (up to 14% of salary)
- Agniveer corpus contribution
- Additional employee cost (80JJAA-type deduction) for businesses
- Interest on a let-out house property against its rent
What it takes away
Most deductions and exemptions: 80C, 80D, HRA, LTA, home loan interest on a self-occupied house, 80G, 80TTA/TTB, professional tax and so on.
A simple way to decide
Add up everything you can claim only in the old regime: 80C, 80D, HRA, home loan interest, 80CCD(1B) and others.
- For most salaried people, the old regime wins only if these add up to roughly ₹4 lakh or more at mid-to-high incomes. Below ₹12.75 lakh salary, the new regime is almost always better because of the rebate.
- Always compare the actual tax. Use the calculator on the Tools page.
Switching rules
- No business income: choose every year in the ITR, before the due date.
- Business or professional income: opting out of the new regime is done through a separate form before the due date. After that you can come back to the new regime only once.
- Salaried people should also tell the employer their choice at the start of the year, so TDS is right. You can still change it when filing the ITR.
Sources
PreviousIncome tax slabs for tax year 2026-27 Next in Tax Rates & Regimes Surcharge, cess and marginal relief
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