Is the new or old tax regime better for FY 2026-27?

For most salaried people the new regime is better: there is zero tax up to 12,00,000 taxable income (Section 87A) and a 75,000 standard deduction, versus a 50,000 deduction and a 5,00,000 rebate limit in the old regime. The old regime wins only when your deductions (HRA, home-loan interest, full 80C/80D) are large.

Which regime is better for a 15 lakh salary?

At around 15 lakh, the new regime is usually cheaper unless you claim large deductions, typically 4 to 5 lakh or more from HRA, a home loan and full 80C. Enter your exact numbers in the planner to see both side by side.

Can I switch between the old and new regime every year?

A salaried person with no business income can choose the regime afresh each year while filing the return. Taxpayers with business/professional income must file Form 10-IEA to opt out of the new regime, and switching back is restricted.

Which deductions are not allowed in the new regime?

The new regime drops most deductions and exemptions: 80C, 80D, HRA, LTA, and home-loan interest on a self-occupied house. The main one still allowed is employer NPS under Section 80CCD(2). Employer EPF and meal coupons remain tax-free in both regimes.

Is the new regime the default?

Yes. The new tax regime is the default from FY 2023-24 onward; you must actively opt for the old regime if it is better for you.

Old vs New Tax Regime (FY 2026-27): Which Is Better?

Updated for FY 2026-27 · illustrative, not financial advice

Short answer: for most salaried people in FY 2026-27 (AY 2027-28), thenew tax regime is better: you pay ₹0 income tax up to ₹12,00,000of taxable income (Section 87A rebate) and get a higher ₹75,000 standard deduction. The old regime only wins if you claim large deductions: rent (HRA), home-loan interest, and a full 80C/80D. The fastest way to be sure is toput your salary into the planner and compare both side by side.

New vs old regime at a glance (FY 2026-27)

	New regime (default)	Old regime
Standard deduction	₹75,000	₹50,000
Zero-tax up to (87A)	₹12,00,000 taxable	₹5,00,000 taxable
Slabs	0/5/10/15/20/25/30% at ₹4/8/12/16/20/24L	0/5/20/30% at ₹2.5/5/10L
80C, 80D, HRA, 24(b), LTA	Not available	Available
Employer NPS 80CCD(2)	Up to 14% of basic	Up to 10% of basic
Employer EPF & meal coupons	Tax-free	Tax-free
Best for	Most salaried people	High rent + home loan + full 80C

Why the new regime usually wins

The Section 87A rebate makes income up to ₹12,00,000 completely tax-free, and with the ₹75,000 standard deduction a salaried person can earn about ₹12.75 lakh with zero tax. To match that in the old regime you would need roughly ₹7.75 lakh of deductions on the same income, far more than most people have. The new regime's lower slab rates then keep tax down at higher incomes too.

When the old regime can still win

The old regime can beat the new one if your deductions are large, for example:

HRA: significant rent in a metro on a high basic (Section 10(13A)).
Home-loan interest: up to ₹2,00,000 on a self-occupied house (Section 24(b)).
80C: the full ₹1,50,000 (EPF, PPF, ELSS, LIC, tuition, principal).
80D health insurance and 80CCD(1B) extra NPS (₹50,000).

As a rough rule of thumb, you typically need ₹4–5 lakh or more of deductions(beyond the standard deduction) before the old regime overtakes the new one, and the exact break-even depends on your income. Check yours in the comparison tool.

Worked example: ₹14 lakh salary

On a ₹14,00,000 CTC with no special deductions, the new regime charges about₹81,900 (taxable ₹13.25 lakh after the ₹75,000 standard deduction). For theold regime to beat that, you would need around ₹5 lakh of deductions (say ₹1.5L HRA + ₹2L home-loan interest + ₹1.5L 80C) just to draw level. With fewer deductions, the old regime costs noticeably more. And in the new regime you can push tax toward ₹0 by routing pay into employer EPF, employer NPS and meal coupons, which theplanner optimises for you.

How to decide

Don't guess. The answer depends on your exact rent, loan and investments.Open the planner, enter your CTC and deductions, and it shows the tax under both regimes side by side, then lets you continue into a full plan for whichever is cheaper.

Frequently asked questions

Is the new or old tax regime better for FY 2026-27?: For most salaried people the new regime is better: there is zero tax up to 12,00,000 taxable income (Section 87A) and a 75,000 standard deduction, versus a 50,000 deduction and a 5,00,000 rebate limit in the old regime. The old regime wins only when your deductions (HRA, home-loan interest, full 80C/80D) are large.
Which regime is better for a 15 lakh salary?: At around 15 lakh, the new regime is usually cheaper unless you claim large deductions, typically 4 to 5 lakh or more from HRA, a home loan and full 80C. Enter your exact numbers in the planner to see both side by side.
Can I switch between the old and new regime every year?: A salaried person with no business income can choose the regime afresh each year while filing the return. Taxpayers with business/professional income must file Form 10-IEA to opt out of the new regime, and switching back is restricted.
Which deductions are not allowed in the new regime?: The new regime drops most deductions and exemptions: 80C, 80D, HRA, LTA, and home-loan interest on a self-occupied house. The main one still allowed is employer NPS under Section 80CCD(2). Employer EPF and meal coupons remain tax-free in both regimes.
Is the new regime the default?: Yes. The new tax regime is the default from FY 2023-24 onward; you must actively opt for the old regime if it is better for you.