Use our old vs new tax regime calculator to check which regime is better for your salary. Simple, fast, and updated for FY 2025. Get clarity on deductions, slabs, and tax benefits to make smarter financial decisions.
Old Vs New Tax Regime Calculator
Head | Details/ Amt. |
---|---|
Gross Income | |
Exemptions u/s 10 A (HRA etc.) | |
Professional Tax | |
Net Income under Salaries | 0.00 |
Standard Deduction (Auto Applied) | 50000 |
Deductions u/s 80 C (PF, PPF, Ins, ELSS, NPS: Max Rs.150000) | |
Deductions u/s 80 CCD (NPS: Max Rs. 50000/-) | |
Deductions u/s 80 D (Health Insurance: Max Rs. 35000/- ) | |
Deductions u/s 80 G (Eligible Donations) | |
Deductions u/s 80 E (Education Loan Interest) | |
Deductions u/s 80 TTA (FD/Post Office Interest: Max Rs. 40000/-) | |
Tax Benefit u/s 24 (Home Loan Interest Paid: Max Rs. 200000/-) | |
Total Deductions/Benefits | 0.00 |
Introduction: Confused Between Old and New Tax Regime? You’re Not Alone.
Filing income tax in India today isn’t just about submitting numbers — it’s about making a smart, strategic choice. Since the introduction of the new tax regime, taxpayers have been stuck in a dilemma: should you stick with the old structure full of deductions, or switch to the new simplified regime?
For salaried professionals, business owners, and pensioners alike, this decision affects not just your annual tax outgo, but also your long-term financial planning. The old vs new tax regime calculator is the key tool that can clear this confusion and help you make the best decision based on actual numbers — not guesswork.

In this article, we’ll break down everything you need to know about both regimes, present updated slabs, explain which is better for whom, and offer a quick way to calculate and compare both. No jargon, no bias — just facts, clarity, and real examples.
What is the Old Tax Regime?
The old tax regime refers to the traditional method of income taxation in India where taxpayers can claim a wide variety of exemptions and deductions to reduce their taxable income. While it involves more documentation, it remains popular among individuals who invest strategically and plan their savings throughout the year.
Key Features of Old Regime
Here’s a snapshot of the major provisions under the old tax regime:
Income Slab (FY 2024–25) | Tax Rate |
---|---|
Up to ₹2.5 lakh | Nil |
₹2.5 lakh to ₹5 lakh | 5% |
₹5 lakh to ₹10 lakh | 20% |
Above ₹10 lakh | 30% |
Note: Senior citizens (60–80 years) and super senior citizens (above 80) enjoy higher basic exemption limits of ₹3 lakh and ₹5 lakh respectively.
Deductions Allowed Under Old Regime
This regime allows taxpayers to reduce their taxable income by claiming the following:
- Standard Deduction of ₹50,000 for salaried/pensioners
- Section 80C: Up to ₹1.5 lakh on investments like PPF, ELSS, LIC, PF
- 80D: Health insurance premiums
- HRA (House Rent Allowance): Based on rent and city
- LTA (Leave Travel Allowance)
- Home Loan Interest (Section 24B): Up to ₹2 lakh
- Many other exemptions and deductions (80G, 80E, etc.)
The key advantage here is flexibility — those who actively invest or have expenses like rent and home loans can bring their tax liability down substantially.
Advantages of Old Regime
- Ideal for high savers: If you invest in eligible instruments, you can reduce your taxable income significantly.
- Maximises deductions: Especially useful for families with education loans, medical expenses, or home loans.
- Proven structure: Familiar for many taxpayers and aligned with traditional financial planning.
Drawbacks of Old Regime
- Complex calculations: You need to keep track of multiple proofs and investments.
- Inflexible for freelancers/small business owners: If your deductions are minimal, this structure becomes expensive.
- Time-consuming: Filing with deductions and exemptions often needs documentation, validation, and sometimes tax advice.
What is the New Tax Regime (Applicable in FY 2024–25)?
The new tax regime, introduced under Section 115BAC and updated via the Union Budget 2023, offers a simplified taxation structure with lower slab rates, but at the cost of removing most deductions and exemptions.
As per recent amendments, this regime is now the default unless a taxpayer explicitly opts for the old regime while filing Income Tax Return (ITR).
Refer to the official Income Tax Department notification for full provisions and filing rules applicable in AY 2024–25.
Latest Changes in New Regime (FY 2024–25)
Here’s how the new tax slabs look for the financial year:
Income Slab (FY 2024–25) | Tax Rate |
---|---|
Up to ₹3 lakh | Nil |
₹3 lakh to ₹6 lakh | 5% |
₹6 lakh to ₹9 lakh | 10% |
₹9 lakh to ₹12 lakh | 15% |
₹12 lakh to ₹15 lakh | 20% |
Above ₹15 lakh | 30% |
Key Highlights:
- Rebate under Section 87A has been increased: Individuals with income up to ₹7 lakh pay zero tax.
- Standard deduction of ₹50,000 is now also applicable under the new regime for salaried and pensioners (as per Budget 2023 updates).
Official circulars such as CBDT Circular No. 04/2023 provide detailed clarification on the adoption and rules for the new regime.
In the next section, we will present a side-by-side slab comparison table, followed by key decision points to help you choose between the two regimes. We’ll also link you to an accurate and instant Old vs New Tax Regime Calculator to simplify everything.
Old vs New Tax Regime: A Side-by-Side Income Tax Slab Comparison
When it comes to tax planning for FY 2024–25, understanding how the two regimes differ in terms of slab rates and rebates is essential. The old vs new tax regime calculator becomes powerful only when you're equipped with updated information on both structures.
Here's a clear comparison of tax slabs under both regimes for individuals below 60 years of age:
Annual Income | Old Regime Tax Rate | New Regime Tax Rate (FY 2024–25) |
---|---|---|
Up to ₹2.5 lakh | Nil | Nil (Up to ₹3 lakh) |
₹2.5–₹5 lakh | 5% | 5% (₹3–₹6 lakh) |
₹5–₹6 lakh | 20% | 5% |
₹6–₹9 lakh | 20% | 10% |
₹9–₹10 lakh | 20% | 15% |
₹10–₹12 lakh | 30% | 15% |
₹12–₹15 lakh | 30% | 20% |
Above ₹15 lakh | 30% | 30% |
Note: Under the new regime, taxpayers earning up to ₹7 lakh can avail 100% rebate under Section 87A, making their net tax liability zero — a key benefit for mid-income earners.
For more details on applicable slab rates and the official rebate structure, refer to the latest notification on Economic Times Taxation Guide.

Key Factors to Consider Before Choosing a Tax Regime
Tax savings are not just about slab rates. Choosing between the two regimes should be based on your individual financial profile. The right decision can reduce your tax burden significantly, and that's exactly where the old vs new tax regime calculator proves to be most useful.
Here are some essential elements to evaluate:
1. Your Total Annual Income
If your income is low or moderate (up to ₹7 lakh), the new regime could make more sense due to the full rebate available. For higher-income individuals, this depends more on deductions.
2. Your Annual Deductions and Exemptions
If you typically claim deductions like:
- ₹1.5 lakh under Section 80C
- ₹50,000 standard deduction
- ₹25,000–₹75,000 under 80D for health insurance
- HRA and home loan benefits
then the old regime might lead to a lower taxable income.
3. Your Life Stage and Responsibilities
Young earners who aren’t investing or claiming deductions may prefer the new regime. On the other hand, families with financial responsibilities — like home loans, children’s education, or medical expenses — may save more under the old regime.
4. Simplicity vs Maximizing Benefits
The new regime simplifies the process — no need to track investment proofs or rent receipts. But if you’re financially disciplined and invested, the old regime rewards that effort through deductions.
To check instantly which option benefits you more, try the Income Tax Calculator by ClearTax, which also provides year-wise breakdowns.
Which Regime is Better for Whom? A Quick Decision Guide
Every taxpayer's situation is unique, but the table below offers a practical framework to understand which regime might suit whom:
You Should Choose Old Regime If… | You Should Choose New Regime If… |
---|---|
You invest in PPF, ELSS, LIC, or EPF regularly | You don’t claim any major deductions |
You pay rent and claim HRA | You find tax filing too complex |
You have a home loan and claim interest deduction | You are a first-time earner without investments |
You claim medical, education loan, or LTA deductions | You want hassle-free tax calculation without documentation |
You are comfortable with documentation and proof submission | You want flat slab rates and minimal interaction |
This helps provide a quick but reasonably accurate decision-making direction. Still, the best approach is to calculate your actual tax liability under both, using a reliable old vs new tax regime calculator before filing your ITR.
Real-Life Example: Which Regime Saves More Tax?
Let’s break the theory into practical numbers. One of the most effective ways to understand which tax regime is more beneficial is to simulate a real-life scenario using actual income and deduction values. This section provides a side-by-side tax calculation for a salaried employee.
Scenario: Employee with ₹12 Lakh Gross Salary
Assumptions under Old Regime:
- Standard Deduction: ₹50,000
- Section 80C (PF, LIC, ELSS): ₹1.5 lakh
- Section 80D (Health Insurance): ₹25,000
- HRA Exemption: ₹1 lakh
- Net Taxable Income: ₹8.75 lakh
Assumptions under New Regime:
- Standard Deduction: ₹50,000 (applicable from FY 2023–24)
- No other deductions allowed
- Net Taxable Income: ₹11.5 lakh
Particulars | Old Regime | New Regime |
---|---|---|
Gross Income | ₹12,00,000 | ₹12,00,000 |
Total Deductions | ₹3,25,000 | ₹50,000 |
Taxable Income | ₹8,75,000 | ₹11,50,000 |
Income Tax Payable | ₹85,000 | ₹89,500 |
Health & Education Cess (4%) | ₹3,400 | ₹3,580 |
Total Tax Payable | ₹88,400 | ₹93,080 |
In this example, the old regime results in lower tax liability due to the taxpayer's ability to claim multiple deductions. However, if the same individual had no deductions to claim, the new regime would have been cheaper and easier.
This is exactly where the value of an old vs new tax regime calculator comes into play — it eliminates guesswork and gives you instant numbers based on your personal inputs.
Try the Old vs New Tax Regime Calculator
To help taxpayers make confident decisions, several reliable online tools are available to compare tax liabilities under both regimes. One such highly accurate and intuitive tool is available at:
➡️ HR Calcy – Old vs New Tax Regime Calculator
(opens in new tab)
How the Calculator Works
The calculator is designed for ease of use and accurate decision-making. It only requires you to:
- Enter your annual income
- Select deductions/exemptions you are eligible for
- Click to view side-by-side comparison
Within seconds, the calculator shows the total tax payable under both regimes — including rebate eligibility and cess — to help you choose the most beneficial option.
The tool has been updated for FY 2024–25 slabs and rebate rules. It even includes support for salaried, self-employed, pensioners, and freelancers, making it versatile and trustworthy.
You can also refer to this MyGov advisory on tax regime selection to understand how the government is guiding taxpayers on making the switch based on income profile.
Official Guidelines and Notifications on Tax Regime Selection
The Income Tax Department has issued detailed rules regarding tax regime selection to ensure transparency and uniformity during ITR filing. With the new tax regime becoming the default option starting FY 2023–24 (AY 2024–25), it’s essential for taxpayers to explicitly opt for the old regime if they wish to avail deductions and exemptions.
According to CBDT Circular No. 04/2023, salaried individuals must inform their employer of their preferred regime at the start of the financial year. If no intimation is given, the employer is required to deduct TDS under the new regime by default.
When to Declare Tax Regime Preference?
- Salaried Employees: Must declare preference for old regime in writing to their employer at the start of FY
- Business/Professionals: Need to opt for old regime at the time of filing ITR using Form 10-IEA
- Default Option: If no choice is made, the new regime will be automatically applied
Can You Switch Regimes Every Year?
Yes — salaried individuals can switch between regimes every assessment year, depending on which one offers more benefit. However, those with business or professional income can only switch once in a lifetime, unless they stop earning business income.
This rule makes using an old vs new tax regime calculator every year even more critical, especially for salaried taxpayers, as it allows flexibility and ensures no unnecessary tax is paid.
Choosing Between the Two: Factors You Must Consider
When it comes to making a choice between the two regimes, no single answer fits all. Your decision should be based on income level, family structure, investment patterns, and future financial goals. What works for a salaried employee with high HRA and 80C investments might not work for a freelancer with minimal deductions.
To make this easier, the old vs new tax regime calculator becomes your best ally. It helps simulate both outcomes instantly based on current-year figures and lets you visualize tax liability under both formats side-by-side.
Key Factors That Influence Your Tax Regime Selection
Criteria | Old Regime Advantage | New Regime Advantage |
---|---|---|
Standard Deduction | Applicable (₹50,000) | Applicable (post Budget 2023 update) |
Deductions (80C, 80D, etc.) | High benefit if fully claimed | Not available |
Income Level | Lower income with high deductions favours | Middle to higher income with fewer deductions favours |
Flexibility in Filing | Can optimise via planned investments | Hassle-free, no tax-saving investments needed |
Family Situation | Suitable for families claiming HRA, LTA, etc. | Ideal for singles or low-expense taxpayers |
Tax Planning Tips for 2025–26 Assessment Year
If you are filing taxes for FY 2024–25 (AY 2025–26), consider the following practical points before locking your regime:
- Recalculate annually: Just because you opted for the new regime last year doesn’t mean it’s optimal now. Use updated tools like this CBDT-endorsed tax calculator before finalizing.
- Salary restructuring: If you’re salaried, you can request a CTC restructure to match your preferred tax regime. For instance, someone choosing the old regime may benefit more from high HRA or LTA allocation.
- Avoid unnecessary investments: If the new regime is more beneficial, you don’t need to lock money in ELSS, PPF or insurance just for tax benefits. Instead, focus on long-term goals.
- Watch for new updates: Tax rules can change every year during the Union Budget. Stay tuned to genuine sources such as PIB India or the official Income Tax portal.
Final Words: Which Regime Wins?
There’s no “one-size-fits-all” winner between the old and new tax regimes. While the old regime allows aggressive tax savings through exemptions and deductions, the new regime simplifies everything with reduced rates and fewer formalities. It’s all about what fits your lifestyle and financial behaviour.
For anyone earning up to ₹15 lakh annually with significant investments under Section 80C, HRA, and health insurance premiums, the old regime is likely to offer more benefits. On the other hand, those with income over ₹20 lakh and minimal deductions may find the new regime leaner and more tax-efficient.
Ultimately, let data guide you. Use a trusted old vs new tax regime calculator before choosing. Recalculate every year based on current exemptions, salary structure, and upcoming life goals. Smart tax planning is not about following trends—it’s about informed decisions.
Key Takeaways
- Old regime favours those with higher deductions; new regime suits simplified taxpayers.
- Recalculate tax liability every year with a reliable calculator.
- Union Budget changes impact deduction rules—review them before filing.
- Your salary structure and financial goals should dictate the choice.
FAQ
What is the difference between the old and new tax regimes?
The old regime allows multiple exemptions and deductions. The new regime offers lower tax rates but removes most deductions like 80C, HRA, etc.
Which tax regime is better for salaried individuals?
It depends on your income and the deductions you claim. Use a trusted old vs new tax regime calculator to compare both and make a choice.
Can I switch between the old and new regimes every year?
Salaried taxpayers can choose between old and new tax regimes every financial year. However, business owners have limited flexibility.
Do I lose all deductions in the new tax regime?
Yes, most deductions like 80C, HRA, LTA are not allowed. However, NPS and EPF employer contributions are still allowed in specific cases.
How do I use the old vs new tax regime calculator?
Enter your income, deductions, and exemptions to get a side-by-side comparison of your tax under both regimes for 2025.
Is the new tax regime mandatory from FY 2023-24?
No, the new regime is the default. But individuals can still opt for the old regime by declaring it at the start of the financial year.
Where can I get an accurate tax calculator for FY 2025?
You can use the free tax regime comparison tool available at Income Tax India or HR Calcy’s calculator.
Does the new tax regime benefit higher earners?
It can, especially if they do not claim deductions. However, the benefit depends on individual income profiles and saving patterns.
Can I file ITR under the old regime in 2025?
Yes, you can file under the old regime if you declare your choice while filing ITR and fulfill eligibility requirements.
Very useful calc
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