Can I switch between old and new regime every year?

Salaried employees and pensioners can switch between old and new regime every year. However, individuals with business income can switch out of the new regime only once (i.e., they can go back to old regime once, but not switch back to new regime again).

Is the new tax regime the default now?

Yes. From FY 2023-24, the New Tax Regime is the default. Taxpayers who want to use the Old Regime must explicitly opt for it while filing their ITR or informing their employer at the beginning of the year.

What is the break-even deduction amount between old and new regime?

The break-even varies by income level. Approximately: if total deductions exceed ₹3.75 lakh at income of ₹15 lakh, old regime saves more. Use a tax calculator for precision since it varies with exact income level.

Income TaxDetailed Comparison

Old Tax Regime vs New Tax Regime

Old vs New Income Tax Regime — which saves you more tax?

Option A

Old Tax Regime

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Option B

New Tax Regime

Overview

India's income tax system now has two regimes. The Old Regime allows deductions (80C, HRA, home loan interest) but has higher slab rates. The New Regime has lower slab rates but almost no deductions. The better choice depends on your total deductions and income level.

Head-to-Head Comparison

Factor	Old Tax Regime	New Tax Regime	Winner
Standard Deduction (Salaried)	₹50,000	₹75,000 (from FY 2024-25)	B wins
Section 80C Deduction	Up to ₹1.5 lakh (LIC, PPF, ELSS, etc.)	Not available	A wins
HRA Exemption	Available — based on rent paid	Not available	A wins
Home Loan Interest (Section 24b)	Up to ₹2 lakh deduction	Not available	A wins
Tax-Free Income Limit	Up to ₹2.5 lakh (+ rebate up to ₹5L)	Up to ₹3 lakh (+ rebate up to ₹7L)	B wins
Tax Rate at ₹15L income	Higher — 30% slab applies at ₹10L+	Lower — 20% slab up to ₹15L	B wins
NPS Employer Contribution	Deductible under 80CCD(2)	Deductible under 80CCD(2) — allowed in new regime too	Tie

Data updated for FY 2025–26. Regulations may change — consult a professional before deciding.

Which Should You Choose?

Choose Old Tax Regime if…

Choose Old Regime if your total deductions (80C, HRA, home loan, NPS, etc.) exceed ₹3.75 lakh — you'll save more tax.

Get Old Tax Regime

Choose New Tax Regime if…

Choose New Regime if your deductions are low or you want simpler filing without tracking investments.

Still not sure which to choose?

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Frequently Asked Questions

Common questions about Old Tax Regime vs New Tax Regime

It depends on your deductions. If you claim 80C (₹1.5L), HRA, home loan interest, and other deductions totaling ₹3.75L+, the Old Regime saves more. Otherwise, New Regime is simpler and often saves more for those with fewer deductions.

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