Old vs New Tax Regime: Which Saves You More?
We calculated the breakeven for salaried individuals across ₹8L to ₹25L income. The answer depends on deductions, not salary.
Tax comparison at ₹15L CTC
— below this, new regime wins
New regime: simpler, lower slabs
The new regime (default from FY 2024-25) offers lower tax slabs with a standard deduction of ₹75,000. No 80C, no HRA, no 80D, no home loan interest. It's straightforward: income minus standard deduction = taxable income. For someone with few investments or no HRA, this is clearly cheaper. The rebate under Section 87A makes income up to ₹12L tax-free under new regime.
Old regime: more deductions, more work
Old regime lets you claim 80C (₹1.5L), 80D (₹25K–₹75K), HRA, home loan interest (₹2L), NPS (₹50K under 80CCD1B), and more. If your total deductions exceed ~₹3.75L, old regime saves more tax. But you need proof for every deduction — rent receipts, insurance premium receipts, home loan certificates. More paperwork, more planning.
Salary-wise breakeven
₹8–10L CTC: new regime almost always wins (not enough deductions to matter). ₹12–15L CTC: depends — if HRA + 80C + 80D > ₹3.75L, old regime wins. ₹18–25L CTC: old regime usually wins if you have HRA + home loan + NPS + insurance. ₹25L+ CTC: old regime wins decisively with full deductions.
What to do
1. **Calculate both regimes** for your specific salary and deductions. Don't assume.\n\n2. **If you have a home loan + HRA**, old regime almost certainly wins.\n\n3. **If you're a fresher with no investments**, new regime is simpler and cheaper.\n\n4. **You can switch every year** (salaried individuals) — pick the better regime at filing time.\n\n5. **Max out NPS (80CCD1B, ₹50K)** — this deduction is available in both regimes for employer contribution, and only old regime for self-contribution.