New vs old tax regime, worked out
The slabs, the rebate, and a complete before-and-after for a salaried earner with a home loan.
The two regimes
India now has two ways to compute income tax. The new regime has lower slab rates but almost no deductions; the old regimehas higher rates but lets you subtract HRA, 80C, 80D, home-loan interest and more first. Neither is always cheaper — the old regime wins when your deductions together beat the new regime's lower rates.
The slabs, FY 2026-27
New regime
| Taxable income | Rate |
|---|---|
| ₹1 – ₹4,00,000 | 0% |
| ₹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% |
Old regime (below 60)
| Taxable income | Rate |
|---|---|
| ₹1 – ₹2,50,000 | 0% |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
On top of the slab tax, everyone gets a standard deduction — ₹75,000 in the new regime and ₹50,000in the old. A 4% cess applies to the final tax in both. The new regime also zeroes tax entirely up to ₹12,00,000 of taxable income through the Section 87A rebate (with marginal relief just above that line, so a ₹1 overshoot doesn't trigger a sudden jump).
A worked example
A salaried earner on ₹1,50,000 a month gross, with ₹60,000 basic, HRA, employer NPS and employee PF — plus a full old-regime declaration: ₹1,50,000 in 80C, ₹25,000 health insurance, ₹2,00,000 home-loan interest and ₹25,000 rent in a metro.
New regime tax
₹1.36 L
₹11,319 / month
Old regime tax
₹1.40 L
₹11,700 / month
new regime wins
₹4.6 K
₹381 / month saved
Whichever way it lands for you, the mechanics are the same: the old regime first shrinks taxable income with HRA, 80C, 80D and home-loan interest — here from ₹16,53,000 in the new regime down to ₹10,75,000 in the old — then taxes that smaller number at higher rates, while the new regime skips most deductions and taxes the bigger number at lower rates. For this profile the new regime wins by ₹4,576a year, which is the point of showing the work: you can't just assume “lower slabs” or “more deductions” wins without comparing the two on your actual numbers.
Show your work
The taxable income and tax above aren't hand-typed — they come from the same tax function FinPlan uses for its salary page and TDS figure. Here's the deduction trail it produced.
New regime — ₹16,53,000 taxable
- Standard deduction−₹75,000
- Employer NPS · 80CCD(2)−₹72,000
Old regime — ₹10,75,000 taxable
- Standard deduction−₹50,000
- Employer NPS · 80CCD(2)−₹72,000
- HRA exemption · 10(13A)−₹2,28,000
- 80C (incl. PF)−₹1,50,000
- Health insurance · 80D−₹25,000
- Home loan interest · 24(b)−₹2,00,000
The old regime caps 80C at ₹1,50,000 (employee PF counts inside it), 80D at ₹75,000 and home-loan interest at ₹2,00,000. These caps are baked into the engine, so the guide honours the same limits the app does.