Compare New vs Old Tax Regime with itemized statutory deductions (80C, 80D, HRA, NPS), Section 87A rebate & 4% cess.
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Total gross salary, business, or professional earnings before standard deduction and exemptions for FY 2025-26.
Gains from listed equity/mutual funds held ≤ 1 year. Taxed at flat 20% across both New and Old Regimes (Union Budget 2024/2025).
Gains from listed equity/mutual funds held > 1 year. Exempt up to ₹1,25,000/year, excess taxed at flat 12.5% in both regimes.
Interest earned from savings accounts and bank FDs (up to ₹10,000 exempt under Section 80TTA in Old Tax Regime).
Combined statutory ceiling of ₹1,50,000 for qualifying Old Regime deductions (PPF, ELSS, EPF, Life Insurance, Employee NPS 80CCD(1)).
Exclusive additional ₹50,000 statutory deduction for voluntary National Pension System (NPS Tier-1) investments over & above Section 80CCE in Old Regime.
Employer's contribution to NPS up to 14% of Basic + DA salary. Has NO fixed rupee maximum cap and is fully deductible in BOTH the New Tax Regime and Old Tax Regime!
Medical insurance premium deduction up to ₹25,000 (self/family) plus up to ₹50,000 for senior citizen parents under Old Regime.
Qualifying House Rent Allowance (HRA) exemption under Section 10(13A) based on actual rent paid and city structure under Old Regime.
Interest paid on housing loan for self-occupied residential property, deductible up to ₹2,00,000 under Section 24b in Old Regime.
100% deduction on interest paid towards higher education loan for self, spouse, or children under Section 80E (No statutory maximum cap!).
Deduction for charitable contributions to approved institutions. Note: Maximum ₹10,000 allowed in cash; balance must be check/online.
You save ₹780 annually (₹65/month) by opting for the New Tax Regime with ₹75,000 Standard Deduction.
| Component / Statutory Head | New Regime (Default) | Old Regime (Itemized) | Net Variance |
|---|---|---|---|
| Gross Salary / Profession Income | ₹15,00,000 | ₹15,00,000 | ₹0 |
| Savings Account & Deposit Interest | ₹20,000 | ₹20,000 | ₹0 |
| Gross Total Income | ₹15,20,000 | ₹15,20,000 | ₹0 |
Standard DeductionSalaried | - ₹75,000 | - ₹50,000 | + ₹25,000 |
| └ Section 80C & 80CCD(1) (PPF/ELSS/EPF) | ₹0 | - ₹1,50,000 | - ₹1,50,000 |
| └ Section 80CCD(1B) Voluntary NPS (Exclusive ₹50k over & above 80CCE) | ₹0 | - ₹50,000 | - ₹50,000 |
| └ Section 80D Health & Medical Insurance | ₹0 | - ₹25,000 | - ₹25,000 |
| └ HRA Rent Exemption (Section 10(13A)) | ₹0 | - ₹1,50,000 | - ₹1,50,000 |
| └ Section 24b Home Loan Interest Exemption | ₹0 | - ₹1,50,000 | - ₹1,50,000 |
| └ Section 80G Charitable Donations | ₹0 | - ₹10,000 | - ₹10,000 |
| └ Section 80TTA Savings Interest Exemption | ₹0 | - ₹10,000 | - ₹10,000 |
| Total Itemized Exemptions Claimed | ₹0 (Disallowed) | - ₹5,45,000 | - ₹5,45,000 |
| Net Normal Slab Taxable Income | ₹14,45,000 | ₹9,25,000 | ₹5,20,000 |
| Normal Slab Income Tax Base | ₹96,750 | ₹97,500 | ₹750 |
Rebate under Section 87AMarginal Relief | ₹0 | ₹0 | — |
| Health & Education Cess (4%) | + ₹3,870 | + ₹3,900 | ₹30 |
| Total Annual Tax Payable | ₹1,00,620 | ₹1,01,400 | New - ₹780 |
| Net Take-Home Annual Income | ₹14,19,380 | ₹14,18,600 | + ₹780/yr |
To match the tax liability of the New Tax Regime (`₹1,00,620`) under the Old Tax Regime, you require approximately ₹15,20,000 in total qualifying itemized deductions (excluding ₹50k standard deduction).
You are currently short by ₹9,75,000 in itemized deductions. Unless you invest more under 80C/80D/HRA/80CCD(1B), the New Regime remains superior.
Comprehensive guide covering foundational concepts, regulatory rules, and advanced strategies.
Under Union Budget 2024 and 2025 reforms, Indian taxation distinguishes between normal slab income and special capital gains. In the New Tax Regime (Default), normal income enjoys a ₹75,000 standard deduction and wide tax brackets (0-4L nil, 4-8L 5%, 8-12L 10%, 12-16L 15%, 16-20L 20%, 20-24L 25%, >24L 30%), with full tax exemption under Section 87A for incomes up to ₹12.75 Lakhs! Conversely, the Old Tax Regime allows claiming extensive itemized exemptions: Section 80C (up to ₹1.5L), voluntary NPS 80CCD(1B) (additional ₹50k), Section 80D (Health up to ₹1L), HRA exemption, Section 24b Home Loan interest (up to ₹2L), Section 80E Education loan interest (100% deductible with zero upper cap), Section 80G donations (up to ₹10k cash allowed), and Section 80TTA savings interest exemption (up to ₹10k).
Capital gains are taxed identically across both the New and Old Regimes. Short-Term Capital Gains (STCG under Section 111A) are taxed at a flat 20%. Long-Term Capital Gains (LTCG under Section 112A) enjoy an annual exemption of ₹1,25,000; any excess gain is taxed at a flat 12.5%. Note that while Section 87A rebate can offset normal slab tax and STCG in the New Regime, it cannot offset Section 112A LTCG! Furthermore, Section 87A marginal relief ensures that when your normal taxable income crosses ₹12 Lakhs by a small margin, your tax liability never exceeds the incremental income above ₹12 Lakhs.