Income Tax Calculator FY 2025–26 — Old vs New Regime
Find out which tax regime saves you more money in FY 2025–26. Compare old regime deductions against new regime lower slabs instantly.
Old regime vs new regime: which is better?
India's income tax system currently offers taxpayers a choice between the old regime — with its complex web of deductions and exemptions — and the new regime, which offers lower tax rates but eliminates most deductions. The new regime is now the default; you must explicitly opt into the old regime when filing. For FY 2025–26, the new regime offers zero tax on income up to ₹12 lakhs for salaried individuals (after the ₹75,000 standard deduction), making it attractive for many middle-income earners.
The old regime makes sense if your deductions and exemptions are large enough to offset the higher tax rates. The key deductions include Section 80C (up to ₹1.5 lakhs), Section 80D (health insurance premiums up to ₹25,000–₹50,000), HRA exemption, home loan interest under Section 24(b) (up to ₹2 lakhs), NPS under 80CCD(1B) (₹50,000), and Leave Travel Allowance. The breakeven point — where both regimes result in equal tax — typically falls at around ₹3–4 lakhs of total deductions for someone earning ₹15–20 lakhs.
Key deductions in the old regime
If you are considering the old regime, maximise every available deduction before comparing. The standard deduction of ₹50,000 applies in both regimes for salaried individuals. Beyond that, the old regime allows:
- Section 80C (₹1.5 lakhs): EPF, PPF, ELSS, life insurance premiums, home loan principal repayment, tuition fees for children, NSC, and 5-year tax-saving FDs all count toward this limit.
- Section 80D (₹25,000–₹1 lakh): Health insurance premiums for self, spouse, children (₹25,000), and parents (additional ₹25,000–₹50,000 for senior citizen parents).
- HRA exemption: Salaried employees paying rent can claim HRA exemption. For Bhubaneswar, which is classified as a non-metro city, the exemption is 40% of basic salary or actual HRA received, whichever is lower.
- Section 24(b): Interest on home loan up to ₹2 lakhs per year for a self-occupied property — a significant deduction for home owners in Odisha with outstanding home loans.
- Section 80CCD(1B): Additional ₹50,000 for NPS contributions, exclusive to the old regime and available over and above the 80C limit.
When new regime makes sense
The new regime is clearly better if your total deductions (excluding the standard deduction) are low. This is often the case for young professionals just starting their careers who do not yet own a home, do not pay significant insurance premiums, and whose 80C is not fully utilised. It is also beneficial for high-income earners above ₹50 lakhs where the new regime's surcharge rates are lower than the old regime.
For Odisha state government employees and central government employees covered under the 7th Pay Commission, the situation is often more nuanced. Their EPF/NPS contributions already fill much of the 80C limit, and many have home loans with substantial interest deductions. Use this calculator to input your exact numbers — salary components, deductions, HRA — and it will show you precisely which regime results in lower tax, removing all guesswork from the decision.