Old vs New Tax Regime FY 2026-27: Which One Saves You More?
On ₹18 lakh, the new regime costs ₹1,50,800 a year. The old regime only wins if your deductions pass ₹6,42,000. See the numbers for your salary.
By the TurantTools team · Updated 17 October 2026 · 6 min read
Every April the same question goes round the office: “Which regime this year, old or new?” HR sends the declaration form, and most people pick one without doing the maths. In this article we'll use real FY 2026-27 numbers to see who should pick which.
First: zero tax up to ₹12.75 lakh in the new regime
The new regime gives a ₹75,000 standard deduction, and the rebate wipes out all tax on taxable income up to ₹12 lakh. So if your salary is ₹12.75 lakh or less, the choice is easy: the new regime, because your tax is zero.
A full example: ₹18 lakh salary
- New regime (standard deduction only): ₹1,50,800 a year.
- Old regime with no deductions: ₹3,51,000.
- Old regime with ₹1.5 lakh under 80C and ₹25,000 under 80D: ₹2,96,400.
Yearly tax on ₹18 lakh
The old regime only wins if your deductions (80C, 80D, HRA, home loan interest, NPS and so on, on top of the standard deduction) add up to more than ₹6,42,000. Most salaried people don't get anywhere near that, which is why the new regime usually wins.
Comparing different salaries
| Salary | New regime | Old (80C + 80D) | Deductions old needs to win |
|---|---|---|---|
| ₹8 lakh | ₹0 | ₹28,600 | never |
| ₹10 lakh | ₹0 | ₹70,200 | never |
| ₹12 lakh | ₹0 | ₹1,11,800 | never |
| ₹12.75 lakh | ₹0 | ₹1,32,600 | never |
| ₹15 lakh | ₹97,500 | ₹2,02,800 | ₹5,44,000 |
| ₹18 lakh | ₹1,50,800 | ₹2,96,400 | ₹6,42,000 |
| ₹20 lakh | ₹1,92,400 | ₹3,58,800 | ₹7,09,000 |
| ₹25 lakh | ₹3,19,800 | ₹5,14,800 | ₹8,01,000 |
| ₹30 lakh | ₹4,75,800 | ₹6,70,800 | ₹8,01,000 |
| ₹50 lakh | ₹10,99,800 | ₹12,94,800 | ₹8,01,000 |
The last column is the useful one: it tells you how much in total deductions you'd need before the old regime pays off. If you rent in a big city and get a large HRA, or pay up to ₹2 lakh of home loan interest, you might cross that line.
Who should still pick the old regime?
- People paying high rent in a big city, with a large tax-free HRA portion.
- Home loan borrowers who claim up to ₹2 lakh of interest and also fill their 80C limit.
- Senior citizens, who get a higher basic exemption only in the old regime (₹3 lakh at 60, ₹5 lakh at 80).