New tax regime or old: run the numbers, not the argument

The new regime is now the default. Whether you should opt out of it depends on arithmetic that takes two minutes, not on which one is “better” in general.

What each regime gives you

The new regime offers wider slabs, a ₹75,000 standard deduction for salaried taxpayers, and a rebate that takes tax to nil up to ₹12 lakh of taxable income — but almost no deductions. The old regime has narrower slabs and a ₹50,000 standard deduction, and keeps 80C, 80D, HRA, home loan interest and the rest.

The break-even

Add up what you genuinely claim: EPF and other 80C items, health premiums under 80D, HRA exemption, home loan interest, NPS under 80CCD(1B). If that total is large, the old regime can still win. At higher incomes the break-even sits around ₹8 lakh of total deductions.

The word “genuinely” is doing the work

Many people count deductions they would not choose to make. If you are buying an insurance-cum-investment policy purely for 80C, the deduction is not free — you are locking money into a 4–5% product to save 30% of a smaller number, once.

HRA is the swing factor

For renters in expensive cities, HRA exemption alone can run to several lakh a year and keeps the old regime competitive. Homeowners without a live home loan almost always land in the new regime.

Switching

Salaried taxpayers can choose afresh each year at filing, whatever they told their employer for TDS. Taxpayers with business income get one switch back and then must stay.

Do it with your own figures

Our income tax calculator computes both regimes side by side from your income and deductions, applies the rebate, surcharge and cess, and names the cheaper one. Use last year’s Form 16 for realistic inputs rather than intentions.