Old vs New Tax Regime Calculator AY 2026-27
Compare your exact income tax under both regimes with HRA, home loan interest, 80C and 80D — get an instant recommendation for AY 2026-27.
Income
Standard deduction: Old regime ₹50,000 | New regime ₹75,000
Deductions (Old Regime Only)
PPF, ELSS, LIC, home loan principal — capped at ₹1.5L
Self ₹25K, parents add ₹25-50K
Annual HRA from employer (monthly HRA × 12)
Annual rent paid
City Type
Metro = Delhi, Mumbai, Kolkata, Chennai
Annual interest paid — capped at ₹2L for self-occupied
Additional NPS contribution over 80C — capped at ₹50K
| Item | Old Regime | New Regime |
|---|---|---|
| Gross Income | ₹15.0L | ₹15.0L |
| Standard Deduction | −₹50,000 | −₹75,000 |
| 80C Investments | −₹1.5L | N/A |
| 80D Health Insurance | −₹25,000 | N/A |
| Taxable Income | ₹12.8L | ₹14.3L |
| Income Tax (before cess) | ₹1.9L | ₹93,750 |
| Education Cess (4%) | ₹7,800 | ₹3,750 |
| Total Tax | ₹2.0L | ₹97,500 |
Recommendation for AY 2026-27
New Regime saves you
₹1.1L/year
With limited deductions, the new regime's lower slab rates and higher standard deduction win.
Deductions you lose by choosing New Regime:
- • 80C investments (PPF, ELSS, LIC etc.): −₹1.5L
- • 80D health insurance premium: −₹25,000
- Total deductions foregone: −₹1.8L (old regime extra deductions over new regime)
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How This Calculator Works
The Old vs New Tax Regime Calculator computes your exact income tax liability under both regimes for AY 2026-27 and recommends which saves you more. It is built on the official slab rates and deduction limits as per the Finance Act 2025 and applies the correct calculation methodology including the Section 87A rebate, Education Cess, and the standard deduction differences between regimes.
Old Regime Calculation: The calculator first applies the ₹50,000 standard deduction, then deducts your HRA exemption (calculated using the three-parameter formula from Income Tax Act Section 10(13A)), 80C investments capped at ₹1.5L, Section 80D health insurance premium, home loan interest capped at ₹2L under Section 24(b), and additional NPS contributions capped at ₹50,000 under Section 80CCD(1B). The resulting taxable income is run through the four-slab old regime structure. A Section 87A rebate of ₹12,500 applies if taxable income is at or below ₹5L. Finally, 4% Education and Health Cess is added.
New Regime Calculation: Only the ₹75,000 standard deduction applies. The remaining gross income is taxed through the seven-slab new regime structure (0%, 5%, 10%, 15%, 20%, 25%, 30%). A higher Section 87A rebate of ₹25,000 applies if taxable income is at or below ₹7L — meaning zero tax up to ₹7.75L gross income in the new regime. Then 4% cess is added.
HRA Exemption Formula: For old regime, the HRA exemption is the minimum of: (1) actual HRA received annually, (2) annual rent paid minus 10% of annual basic salary, and (3) 50% of annual basic salary for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metro. The calculator estimates basic salary as 50% of gross income, which is a common structure in Indian salary compositions.
What drives the recommendation:For most people with a gross income between ₹7.5L and ₹15L who don't have large deductions, the new regime wins due to lower slab rates and the higher standard deduction. Once you introduce a home loan with ₹1.5-2L annual interest, combined with ₹1.5L in 80C and meaningful HRA, the old regime can save ₹50,000-1,20,000 annually. The break-even total deduction level is roughly 3-4x the income bracket.
This calculator does not account for employer NPS contributions under Section 80CCD(2), which remain deductible even under the new regime, or for self-employed individuals who have a different set of allowable deductions. For complex cases, consult a chartered accountant.
Frequently Asked Questions
For AY 2026-27, the new regime is better for most salaried individuals with modest deductions. The new regime offers a higher standard deduction of ₹75,000 (vs ₹50,000 old), a higher rebate limit of ₹7L (vs ₹5L old), and more granular slabs. The old regime wins when you have large deductions — particularly home loan interest (up to ₹2L via Sec 24b), 80C investments of ₹1.5L, significant HRA, and NPS contributions. Use this calculator with your actual numbers to get a definitive answer.
The old regime allows numerous deductions (80C, 80D, HRA, home loan interest, NPS, LTA etc.) but has higher slab rates and lower income thresholds. The new regime has lower and more granular rates, a higher basic exemption via the rebate, but disallows most deductions. The key difference: high-deduction taxpayers (especially with home loans) save more in the old regime, while low-deduction taxpayers or those who don't claim most allowances benefit more from the new regime's lower rates.
Having a home loan is the strongest argument for the old regime. Section 24(b) allows you to deduct up to ₹2L of annual home loan interest from taxable income. For someone in the 30% tax bracket, this alone saves ₹62,000 in tax. Combined with ₹1.5L in 80C investments and HRA, total deductions can exceed ₹4-5L, which can make the old regime significantly better. However, the exact answer depends on your income level — use this calculator to compare your specific situation.
The new tax regime allows very limited deductions. You get a ₹75,000 standard deduction (for salaried employees), employer contributions to NPS (Sec 80CCD(2)), certain transport allowances, and leave encashment benefits. That's largely it. Deductions specifically not available in the new regime include: 80C (PPF, ELSS, LIC, EPF), 80D (health insurance), home loan interest under Sec 24(b), HRA exemption, LTA, and most other Chapter VI-A deductions except NPS employer contribution.
Yes, from AY 2024-25 onwards, a standard deduction of ₹75,000 is available under the new tax regime (increased from ₹50,000 in AY 2023-24). The old regime standard deduction remains at ₹50,000. This change made the new regime more attractive for salaried individuals, as the ₹75,000 deduction directly reduces taxable income before slabs are applied. The additional ₹25,000 benefit in the new regime is particularly impactful for mid-income earners in the 20% slab, saving ₹5,000 extra in tax.
The home loan interest deduction under Section 24(b) is capped at ₹2L per year for self-occupied property. At a 30% tax slab, this saves ₹60,000 in tax (plus 4% cess = ₹62,400). At 20%, it saves ₹40,000+. Combined with 80C savings of up to ₹1.5L (saving ₹46,800 at 30%), a home loan holder can save ₹1-1.1L annually in the old regime through these two deductions alone. This is often the decisive factor that makes the old regime better for home loan borrowers.
HRA exemption is the minimum of three values: (1) Actual HRA received from employer, (2) Rent paid minus 10% of basic salary, and (3) 50% of basic salary for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metro. For example, if your basic is ₹60,000/month, HRA is ₹25,000/month, you pay ₹20,000 rent in a metro: the exemption = min(₹25,000, ₹20,000 − ₹6,000 = ₹14,000, ₹30,000) = ₹14,000/month or ₹1.68L/year. HRA is not available in the new regime.
At ₹10L annual salary with no other deductions, the new regime is better. New regime taxable income: ₹10L − ₹75,000 = ₹9.25L, tax = ₹82,500, cess = ₹3,300, total = ₹85,800. Old regime taxable income: ₹10L − ₹50,000 = ₹9.5L, tax = ₹1,12,500, cess = ₹4,500, total = ₹1,17,000. The new regime saves ₹31,200. However, if you claim ₹1.5L in 80C and ₹50,000 in 80D, the old regime taxable income drops to ₹7.5L with tax of ₹65,000+cess = ₹67,600, making the old regime better by ₹18,200.
The old regime saves more when your total eligible deductions exceed a break-even threshold, which varies by income. Rough rule of thumb: if your deductions (80C + 80D + HRA + home loan interest + NPS) exceed ₹3.75L at ₹15L income or ₹4.5L at ₹20L income, the old regime is better. The single biggest trigger is usually having a home loan above ₹20-25L, which generates ₹1.5-2L in annual interest deductible under Sec 24b. Anyone with a significant home loan in the 30% bracket almost always saves more in the old regime.
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Reviewed by Ekatra's experts • Updated May 2026