Old vs New Tax Regime Comparison – India FY 2025-26

Frequently asked questions

Which regime is the default for FY 2025-26?+

The new regime is the default. You must actively opt out via Form 10-IEA to use the old regime if you're a business/profession taxpayer. Salaried employees can switch between regimes each year by informing the employer and filing the ITR accordingly.

When does the old regime save more tax?+

The old regime wins when your combined deductions (80C + 80D + HRA + 24(b) home-loan interest + standard) exceed roughly ₹4.25L-₹4.75L. Below that, the lower slab rates of the new regime usually win. Use the calculator above with your actual numbers to decide.

Is the ₹12L zero-tax threshold in the new regime real?+

Yes, under Finance Act 2025 the rebate u/s 87A has been expanded so that total tax is zero up to ₹12L of taxable income (₹12.75L gross after ₹75k standard deduction). Above ₹12L, slab tax kicks in from the first rupee and the rebate doesn't apply.

Can I change my regime every year?+

Salaried individuals: yes, freely each year in ITR. Business or professional taxpayers: you can opt out of the new regime and into the old regime only once in a lifetime (via Form 10-IEA), and opting back in is allowed only once. Most business owners are better off staying on the default new regime.

Does 80C still work in the new regime?+

No. Under the new regime, 80C, 80D (non-NPS), HRA, LTA, and most other deductions are unavailable. The tradeoff is lower slab rates + zero tax up to ₹12L. The only deductions allowed are standard deduction (₹75k salaried) and employer NPS contribution u/s 80CCD(2).