Old vs New Tax Regime Calculator (FY 2025-26)
Every financial year, taxpayers in India face an important choice: should they continue with the old tax regime or opt for the new one?
The old regime rewards tax planning through deductions and exemptions, while the new regime focuses on simplicity with revised slab rates and fewer deductions.
What makes this decision tricky is that the best option depends completely on your income and the deductions you claim. Two people earning the same salary can end up paying very different taxes.
That is why using an old vs new tax regime calculator is the easiest and most reliable way to compare both regimes. It removes confusion and shows the tax payable under each system instantly.
This guide explains both regimes clearly, based on the latest FY 2025-26 rules, so you can make the right choice with confidence.
What Is the Old Tax Regime?
The old tax regime is the traditional income tax system that allows taxpayers to reduce their taxable income through deductions and exemptions. It is especially useful for individuals who invest in tax-saving schemes or have commitments like home loans and insurance.
How the Old Tax Regime Works
Your taxable income under the old regime is calculated as follows:
Taxable Income = Gross Salary – Standard Deduction – Eligible Deductions
The eligible deductions include:
- Section 80C (Up to ₹1.5 Lakh): Includes PPF, ELSS mutual funds, LIC premiums, tuition fees, and home loan principal repayment.
- Section 80D (Health Insurance): Deduction for health insurance premiums paid for self and family, with higher limits for senior citizens.
- Section 24(b) (Home Loan Interest): Interest paid on a self-occupied home loan is deductible up to ₹2,00,000 per year.
- Other Deductions: Additional deductions such as NPS contributions and savings account interest benefits may apply depending on eligibility.
- Standard Deduction: A flat deduction of ₹50,000 available to all salaried taxpayers under the old regime.
Old Tax Regime Slabs (FY 2025-26)
Once you calculate your taxable income, the tax is applied using these slab rates:
| Taxable Income | Tax Rate |
|---|---|
| ₹0 – ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Section 87A Rebate (Old Regime)
If your taxable income does not exceed ₹5,00,000, you get a full rebate under Section 87A, resulting in zero tax payable.
What Is the New Tax Regime (FY 2025-26)?
The new tax regime has been updated for FY 2025-26 with revised slab rates and a higher rebate benefit. It is designed to make tax filing simpler and more attractive for taxpayers who do not claim many deductions.
How the New Tax Regime Works
Your taxable income under the new regime is calculated as:
Taxable Income = Gross Salary – Standard Deduction
Most deductions such as 80C, 80D, and home loan interest are not available under the new regime. However, the slab rates are revised and the standard deduction for salaried taxpayers is higher.
New Tax Regime Slabs (FY 2025-26)
The new regime offers more favorable tax rates:
| Taxable Income | Tax Rate |
|---|---|
| ₹0 – ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Section 87A Rebate (New Regime FY 2025-26)
A major benefit of the updated new regime is that taxpayers with taxable income up to ₹12,00,000 can pay zero tax due to the enhanced Section 87A rebate. This makes the new regime highly attractive for middle-income salaried individuals.
Health and Education Cess
A mandatory 4% Health and Education Cess is applied on the calculated tax amount under both regimes.
How the Old vs New Tax Regime Calculator Works
Our calculator uses the latest income tax rules for FY 2025-26 to compute tax liability under both regimes and show a clear side-by-side comparison.
Details You Need to Enter
The calculator requires the following information:
- Annual Gross Salary: Your total salary income.
- Standard Deduction: ₹50,000 under old regime and ₹75,000 under new regime (FY 2025-26).
- 80C, 80D & Other Deductions: Applicable only under the old regime.
- Home Loan Interest: Interest eligible under Section 24(b) (old regime only).
What the Calculator Shows
The calculator instantly shows:
- Taxable income under both regimes
- Slab-wise tax calculation
- Rebate eligibility under Section 87A
- Health & Education cess
- Final tax payable
- Recommendation on which regime saves more tax
Real-Life Examples: Old vs New Tax Regime
These examples show how the outcome changes depending on income level and deductions claimed.
Income ₹12,00,000 with Minimal Deductions
Result: Under FY 2025-26 rules, the new regime can result in zero tax due to the enhanced rebate benefit.
Income ₹20,00,000 with High Deductions
Result: If you claim substantial deductions like home loan interest and 80C, the old regime may still provide better savings.
Which Tax Regime Should You Choose?
The right regime depends on how many deductions you claim and your income structure.
Old Regime Is Better If:
- You utilise deductions under 80C, 80D, and home loan interest
- You invest regularly for tax-saving purposes
- You want maximum deductions and exemptions
New Regime Is Better If:
- You have minimal deductions
- You want a simpler tax structure
- You benefit from the enhanced rebate up to ₹12 lakh taxable income
Why Use Our Old vs New Tax Regime Calculator?
- ✓
Latest FY 2025-26 Rules
Calculator updated with the new regime slabs and rebate changes announced in Budget 2025.
- ✓
Instant Comparison
See tax payable under both regimes side-by-side within seconds.
- ✓
Better Tax Planning
Helps you decide whether deductions make the old regime more beneficial or not.
Frequently Asked Questions
Can taxable income up to ₹12 lakh be tax-free in FY 2025-26?
Yes. Under the updated new tax regime for FY 2025-26, enhanced Section 87A rebate can make tax payable nil for taxable income up to ₹12 lakh.
Can I switch tax regimes every year?
Yes. Salaried individuals can choose either regime every financial year while filing their income tax return.
Which regime is better for FY 2025-26?
It depends on your deductions. The new regime is beneficial for those with fewer deductions, while the old regime works better if you claim significant exemptions.
Conclusion
Choosing between the old and new tax regime should always be based on calculation, not assumptions.
With the updated FY 2025-26 new regime offering zero tax up to ₹12 lakh taxable income, many salaried taxpayers may find it beneficial.
However, individuals with significant deductions and exemptions may still save more under the old regime.
Use our Old vs New Tax Regime Calculator for FY 2025-26 to compare both options clearly and choose the regime that helps you save the most tax.
Sources
Accuracy, Expert Review & Official Sources
Built on official Indian tax regulations and verified by certified professionals
Last Updated: 9 February 2026
Specialized in financial tools, tax regulations, and calculator precision
Calculations verified against official Indian tax guidelines and regulations
This Old vs New Tax Regime Calculator is built on official Indian tax regulations and government guidelines:
Official source for Indian income tax acts, rules, notifications, and guidance
Official tax rebate provisions for new tax regime
Complete rules and provisions for new tax regime introduced in Budget
This calculator is for informational and educational purposes only. This calculator compares old and new tax regimes based on current FY regulations. Actual tax liability depends on your specific deductions, investments, and financial situation. Results are estimates only. Always consult a qualified CA to determine the best regime for your circumstances.
Key Limitations:
- • Does not constitute professional tax or legal advice
- • Individual tax situations are unique and may require adjustments
- • Changes in tax laws may affect accuracy of results
- • Additional deductions, exemptions, or taxes may apply
- • State-specific taxes and other regulations are not included
Always consult a qualified Chartered Accountant or tax professional before making tax-related decisions.
All calculations are performed locally in your browser. No data is sent to servers or stored. Your financial information remains completely private.
Meet the Toolisky Team
Specialists dedicated to making tax tools and calculators easier for everyone
Toolisky is an independent platform created to help users with tax calculations and educational insights. For official filing or legal decisions, users should consult a certified tax professional.
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