Old vs New Tax Regime: Which is Better?
The Government of India has introduced a New Tax Regime with lower tax brackets, but it removes almost all traditional deductions like Section 80C, HRA, and LTA. Taxpayers are now faced with a choice every financial year: stick with the Old Regime or switch to the New one.
How to Choose?
Generally, the rule of thumb is:
- Choose the Old Regime if your annual income is above ₹10 Lakhs AND you claim maximum deductions (₹1.5L under 80C, high HRA exemption, Home Loan interest, and Health Insurance).
- Choose the New Regime if you do not have significant investments or rent receipts. The New Regime is also the default and is completely tax-free up to ₹7 Lakhs of income!
Don't guess which one is better. Use our Income Tax Calculator to input your gross salary and deductions, and let our algorithm compare both regimes side-by-side to declare the winner.