Old or new tax regime in FY 2026-27
Old versus new income tax regime for salaried people in FY 2026-27: both slab tables, and exactly how much in deductions the old regime needs to win at every salary.
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The new regime is the default for Tax Year 2026-27 (FY 2026-27), and for most salaried people it is also the cheaper one. It has lower rates across the middle, a ₹75,000 standard deduction, and a rebate that makes a salary of up to about ₹12,75,000 tax-free. The old regime keeps its deductions (HRA, section 123 which was 80C, health insurance, home loan interest) but charges more on the income that is left.
The useful question is not which regime is better in general, but how much you would have to claim for the old one to win at your salary. That number is below.
The two slab tables
New regime (section 202)
| Taxable income | Rate |
|---|---|
| ₹0 to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Standard deduction ₹75,000. A rebate of up to ₹60,000 makes taxable income up to ₹12,00,000 tax-free, with marginal relief just above it.
Old regime, below 60
| Taxable income | Rate |
|---|---|
| ₹0 to ₹2,50,000 | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Standard deduction ₹50,000. A rebate of up to ₹12,500 covers taxable income up to ₹5,00,000, with no relief above it. Senior citizens get higher exemption limits.
Both regimes add a 4% health and education cess, and a surcharge above ₹50 lakh.
What still counts in the new regime
- The ₹75,000 standard deduction.
- Your employer's NPS contribution, up to 14% of Basic plus DA for every employee. This is the one real planning lever left in the new regime.
HRA, section 123 (80C), health insurance, 80CCD(1B), home loan interest on a self-occupied house and professional tax are all ignored.
How much the old regime needs, salary by salary
The table uses the calculator's standard structure (Basic at half of CTC, PF at the wage ceiling, Karnataka professional tax). "Extra needed" is how much you would have to claim on top of what the old regime already gives you, which is the ₹50,000 standard deduction, professional tax and your PF under section 123. The capped deductions without HRA (the rest of section 123, ₹50,000 of NPS, ₹25,000 of health insurance and ₹2 lakh of home loan interest) can add at most about ₹3,95,640.
| CTC | New regime tax | Extra needed | Without HRA? | Rent that tips it |
|---|---|---|---|---|
| 14 LPA | ₹64,466 | ₹5,07,697 | No | ₹32,000 a month |
| 16 LPA | ₹1,02,520 | ₹5,19,936 | No | ₹34,000 a month |
| 18 LPA | ₹1,35,693 | ₹5,85,598 | No | ₹40,000 a month |
| 20 LPA | ₹1,76,293 | ₹6,50,662 | No | ₹46,500 a month |
| 24 LPA | ₹2,69,866 | ₹7,41,132 | No | ₹55,500 a month |
| 30 LPA | ₹4,44,140 | ₹7,68,141 | No | ₹60,500 a month |
| 40 LPA | ₹7,48,640 | ₹7,68,141 | No | ₹64,500 a month |
| 50 LPA | ₹10,53,140 | ₹7,68,141 | No | ₹69,000 a month |
"Rent that tips it" assumes you live in one of the eight cities with the 50% HRA limit and have also filled section 123, the extra NPS and health insurance, but have no home loan.
Why the bar stops rising at ₹7,68,141
Above ₹24 lakh of taxable income both regimes charge 30% on each extra rupee, so the gap between them stops growing. From there on the old regime needs the same ₹7,68,141 of extra deductions whatever you earn, until the ₹50 lakh surcharge threshold changes the picture again. Because the capped deductions cannot reach that on their own, a high earner only benefits from the old regime with a large HRA exemption or a big home loan, and usually both.
Switching
A salaried person can choose each year: tell your employer at the start of the year so the right tax is deducted from your salary, and you can still pick the other regime when you file your return. Try both with your own figures.
Sources: Income-tax Act, 2025, sections 19, 123 to 126, 156 and 202; Finance Act 2026, First Schedule. Full method.