Old vs New Tax Regime FY 2026-27: Which Saves You More?

To choose between the old and new tax regime for FY 2026-27, enter your salary and the deductions you actually claim in the Income Tax Calculator. It works out your tax under both regimes side by side and tells you which is lower and by how much. For most salaried people with modest deductions the new regime wins, and up to ₹12.75 lakh of salary it costs nothing at all.

Figures here use the calculator's rates as of 1 November 2026. They are planning estimates, not tax advice; confirm on the Income Tax Department's portal before you file.

What are the income tax slabs for FY 2026-27?

FY 2026-27 is the first year under the Income-tax Act, 2025, which calls it "tax year 2026-27" (AY 2027-28). The Act renumbers sections but the slab rates carried over, and the calculator keeps familiar names such as 80C and 80D.

New regime (the default):

• Up to ₹4 lakh: nil
• ₹4 lakh to ₹8 lakh: 5%
• ₹8 lakh to ₹12 lakh: 10%
• ₹12 lakh to ₹16 lakh: 15%
• ₹16 lakh to ₹20 lakh: 20%
• ₹20 lakh to ₹24 lakh: 25%
• Above ₹24 lakh: 30%

Salaried people get a ₹75,000 standard deduction. If taxable income is ₹12 lakh or less, a rebate of up to ₹60,000 cancels the tax. Just above ₹12 lakh, marginal relief stops your tax from exceeding the income you earned above that line.

Old regime (below 60): nil up to ₹2.5 lakh, 5% to ₹5 lakh, 20% to ₹10 lakh and 30% above. The nil band rises to ₹3 lakh at 60 to 79, and at 80 or above it is nil up to ₹5 lakh, then 20% to ₹10 lakh and 30% above. The standard deduction is ₹50,000, and the rebate (up to ₹12,500) applies only when taxable income is ₹5 lakh or less.

Both regimes add 4% health and education cess. Surcharge starts above ₹50 lakh (10%), rising to 15% above ₹1 crore and 25% above ₹2 crore. Above ₹5 crore the old regime charges 37%, while the new regime stays at 25%.

Which deductions does only the old regime allow?

The calculator applies these limits for you, so type what you actually paid or invested:

• HRA exemption (work it out with the HRA Calculator)
• Professional tax, up to ₹2,500
• 80C, 80CCC and 80CCD(1) combined: ₹1.5 lakh (your EPF, PPF, ELSS, life insurance, home loan principal)
• 80CCD(1B): an extra ₹50,000 for your own NPS contribution
• 80D health insurance: ₹25,000 for yourself and family (₹50,000 if you are 60 or over), plus ₹25,000 for parents (₹50,000 if they are senior citizens)
• Home loan interest on a self-occupied house: up to ₹2 lakh
• 80E education loan interest and 80G eligible donations
• 80TTA savings interest up to ₹10,000, or 80TTB deposit interest up to ₹50,000 if you are 60 or over

Both regimes allow the standard deduction, a family pension deduction (one third, capped at ₹25,000 in the new regime and ₹15,000 in the old) and your employer's NPS contribution. The calculator asks you to enter only the employer NPS amount within 14% of basic + DA (new regime) or 10% (old regime).

Worked examples at four salary levels

Each assumes age below 60 and salary as the only income.

₹10 lakh salary. New regime: taxable ₹9,25,000, slab tax ₹32,500, fully rebated: ₹0. Old regime with the full ₹1.5 lakh under 80C and ₹25,000 under 80D: taxable ₹7,75,000, tax ₹67,500 plus ₹2,700 cess = ₹70,200.

₹12.85 lakh salary. New regime: taxable ₹12,10,000 and slab tax ₹61,500. Because income is only ₹10,000 above ₹12 lakh, marginal relief of ₹51,500 cuts the tax to ₹10,000, and with ₹400 cess you pay ₹10,400.

₹15 lakh salary. New regime: taxable ₹14,25,000, so ₹93,750 + ₹3,750 cess = ₹97,500. Old regime with only 80C and 80D (the calculator's starting values): taxable ₹12,75,000, so ₹2,02,800. Now add heavy old-regime claims: HRA exemption of ₹1,56,000 (basic ₹50,000 a month, HRA ₹20,000, rent ₹18,000 in Bengaluru), professional tax ₹2,500, 80C ₹1.5 lakh, NPS under 80CCD(1B) ₹50,000, 80D ₹25,000 and ₹2 lakh of home loan interest. Taxable income falls to ₹8,66,500 and old-regime tax is ₹89,232. The calculator reports: "The old regime saves you ₹8,268 (₹689 a month)."

₹25 lakh salary. New regime: taxable ₹24,25,000, tax ₹3,19,800. With the same heavy deductions the old regime comes to ₹3,87,348, so the new regime is ₹67,548 cheaper.

How much in deductions do I need for the old regime to win?

Using the calculator's slabs, these are the break-even figures, counting deductions on top of the ₹50,000 old-regime standard deduction:

• Up to ₹12.75 lakh salary: the old regime can never beat the new one, because new-regime tax is zero.
• ₹15 lakh: about ₹5.44 lakh of deductions.
• ₹20 lakh: about ₹7.08 lakh.
• About ₹25 lakh up to ₹50 lakh: a steady ₹8 lakh, because both regimes are in the 30% band and the gap between them stays fixed.

80C, 80CCD(1B), 80D for yourself and professional tax together reach ₹2.275 lakh, so getting past ₹5 lakh usually takes a large HRA exemption, a home loan, or both.

How do I compare both regimes for my salary?

1. Open the Income Tax Calculator and choose Your age.
2. Enter Gross salary (incl. taxable allowances) before any exemptions, plus Other income and Family pension received if any.
3. If you pay rent, open the HRA Calculator, choose FY 2026-27, enter your monthly basic, DA, HRA and rent, and pick City you live in. Copy "HRA exempt from tax" into the HRA exemption box.
4. Fill the old-regime boxes with what you actually paid. The new regime ignores them.
5. Compare New regime — total tax with Old regime — total tax. Switch Show the calculation for to see the slab-by-slab working, and download it as PDF or CSV.
6. To see what each regime does to your monthly pay, run the CTC to In-hand calculator once with Tax regime set to New and once with Old.

Which cities get 50% HRA from FY 2026-27?

The HRA calculator uses 50% of basic + DA for Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad; the last four join from FY 2026-27 under the Income-tax Rules, 2026 (as reported, so confirm with your employer). Other cities use 40%. The exemption is the lowest of HRA received, rent minus 10% of basic + DA, and that 50% or 40%.

Common mistakes when comparing regimes

• Entering salary after exemptions. HRA goes in its own box.
• Counting EPF twice. Your own EPF is part of the ₹1.5 lakh 80C limit, not on top of it.
• Expecting professional tax to help in the new regime. It is deductible only under the old regime.
• Leaving savings interest out of Other income. 80TTA/80TTB is capped at the interest you include as income, so enter it in both places.
• Including capital gains. The calculator covers normal slab-rate income only; special-rate capital gains, business and agricultural income are excluded.
• Treating the result as final. Your employer deducts TDS by the regime you declare; check the current rules on switching regimes before you file.

Quick answers

Is salary up to ₹12.75 lakh tax-free in FY 2026-27?

Under the new regime, yes. The ₹75,000 standard deduction brings ₹12.75 lakh of salary down to ₹12 lakh of taxable income, and the rebate of up to ₹60,000 cancels the tax on it. This applies to income taxed at normal slab rates.

Which tax regime is better on a ₹15 lakh salary?

With only 80C and 80D, the new regime is much cheaper (₹97,500 against ₹2,02,800). The old regime wins only if your deductions above the standard deduction pass about ₹5.44 lakh, which usually needs a large HRA exemption and a home loan.

Can I claim HRA and 80C in the new regime?

No. HRA exemption, 80C, 80D, 80CCD(1B), home loan interest on a self-occupied house and professional tax count only under the old regime. The new regime allows the ₹75,000 standard deduction, employer NPS and the family pension deduction.

What is marginal relief in the new regime?

If your taxable income is just over ₹12 lakh, your tax before cess can't be more than the amount by which you crossed ₹12 lakh. At ₹12,10,000 of taxable income the tax is ₹10,000 plus 4% cess, ₹10,400 in total.