Tax
Old vs New Tax Regime: Which is Better for AY 2026-27?
CalculatorBox Tax Experts
July 7, 2026
6 min read
Choosing the right income tax regime in India is one of the most critical financial decisions salaried individuals make at the start of every assessment year. Here is a simplified breakdown.
The Key Differences
The primary distinction is simple:
- The Old Regime: Features higher tax slab rates but allows you to claim numerous tax-saving exemptions and deductions, such as Section 80C (PPF, LIC, EPF), Section 80D (health insurance), and HRA exemptions.
- The New Regime: Offers significantly lower, simplified tax slabs but requires you to forego almost all tax exemptions (except for standard deduction and NPS employer contribution).
New Tax Regime Slabs (AY 2026-27 / FY 2025-26)
| Income Slabs | New Tax Rates |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 to ₹7,00,000 | 5% |
| ₹7,00,001 to ₹10,00,000 | 10% |
| ₹10,00,001 to ₹12,00,000 | 15% |
| ₹12,00,001 to ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Which One Should You Choose?
As a thumb rule, if your total eligible deductions (80C, HRA, home loan interest, etc.) exceed ₹3.75 Lakhs per year, the Old Regime might save you more money. If you do not have active investments or rent liabilities, the New Regime is generally more profitable and easier to file.
You can calculate your custom tax savings instantly by comparing both regimes on the CalculatorBox Income Tax Calculator tool.