Old Regime vs New Regime — Which Saves More Tax?
TL;DR: The new regime is better for most taxpayers due to lower slab rates, higher standard deduction, and full rebate for lower incomes. But if you claim heavy deductions (80C + HRA + 80D + home loan), old regime may save more. Check with your exact numbers — free calculator →
Key Differences
| Feature | Old Regime | New Regime |
|---|---|---|
| Slab rates | Higher (5%, 20%, 30%) | Lower (5%, 10%, 15%, 20%, 25%, 30%) |
| Standard deduction | ₹50,000 | ₹75,000 |
| Section 80C (₹1.5L) | ✅ Available | ❌ Not available |
| HRA exemption | ✅ Available | ❌ Not available |
| Section 80D (health insurance) | ✅ Available | ❌ Not available |
| Home loan interest (Sec 24) | ✅ Up to ₹2L | ❌ Not available |
| Rebate u/s 87A | ₹12,500 if income ≤ ₹5L | Full rebate if taxable income ≤ ₹12L |
| Default regime | Must opt in | Default (since FY 2023-24) |
When Old Regime is Better
- You claim ₹1.5L under Section 80C (EPF, ELSS, PPF, life insurance)
- You pay significant rent and claim HRA exemption (especially in metro cities)
- You have a home loan with ₹2L interest deduction under Section 24
- You pay health insurance premium (Section 80D — up to ₹75K with parents)
- Your total deductions exceed ₹3-4L
When New Regime is Better
- You don't claim many deductions (no HRA, minimal 80C)
- Your income is below ₹12L taxable (full rebate = zero tax)
- You're a first-time filer without investments in 80C instruments
- Your employer doesn't deduct HRA (you live with parents or own a house)
- You prefer simplicity — fewer deductions to track and prove
How to Decide — Use TaxZen's Free Calculator
Don't guess — calculate. TaxZen's regime comparison calculator computes your exact tax under both regimes and shows the ₹ difference. It considers all deductions: 80C, 80D, HRA, home loan, NPS, and more.
Check now: Old vs New Regime Calculator — see which saves you more →