tax · 13 min read
Old vs New Tax Regime FY 2026-27: Spreadsheet-Level Breakdown
Side by side tax math at 10L, 15L, 25L, 50L and 1Cr income under both regimes for FY 2026-27. See the exact break-even points and which deductions actually matter.
By CalcCrack Editorial Team · Published
Last updated: 15 April 2026
The new tax regime rebate has been raised to 12,00,000 of taxable income effective FY 2026-27, and the standard deduction for salaried taxpayers has moved to 75,000. These two changes by the Finance Act 2025 shift the break even between the two regimes dramatically. For most salaried people earning under 15 lakh, the new regime now wins by a comfortable margin even after a full Section 80C claim.
Quick Answer
Under the new regime for FY 2026-27, income up to 12 lakh pays zero tax after Section 87A rebate. The slab structure is: 0 to 4 lakh nil, 4 to 8 lakh at 5 percent, 8 to 12 lakh at 10 percent, 12 to 16 lakh at 15 percent, 16 to 20 lakh at 20 percent, 20 to 24 lakh at 25 percent, above 24 lakh at 30 percent. The old regime keeps its 2.5 lakh to 5 lakh basic exemption and slab structure topping at 30 percent above 10 lakh. Which regime wins for you depends entirely on how much deduction you can genuinely claim.
Slab Comparison Side by Side
Here are the two slab structures for FY 2026-27.
| Income Slab | Old Regime Rate | New Regime Rate |
|---|---|---|
| Up to 2,50,000 | 0 percent | 0 percent |
| 2,50,001 to 4,00,000 | 5 percent | 0 percent |
| 4,00,001 to 5,00,000 | 5 percent | 5 percent |
| 5,00,001 to 8,00,000 | 20 percent | 5 percent |
| 8,00,001 to 10,00,000 | 20 percent | 10 percent |
| 10,00,001 to 12,00,000 | 30 percent | 10 percent |
| 12,00,001 to 16,00,000 | 30 percent | 15 percent |
| 16,00,001 to 20,00,000 | 30 percent | 20 percent |
| 20,00,001 to 24,00,000 | 30 percent | 25 percent |
| Above 24,00,000 | 30 percent | 30 percent |
Add 4 percent health and education cess on the tax plus applicable surcharge for both regimes.
Deductions Allowed in Each Regime
The old regime permits a long list of deductions. The new regime permits only two meaningful ones for salaried people.
Old Regime Deductions
- Section 80C up to 1,50,000 (PPF, ELSS, EPF, life insurance premium, principal repayment on home loan, Sukanya Samriddhi)
- Section 80D up to 25,000 for health insurance of self, spouse, and dependent children; additional 50,000 for senior citizen parents
- Section 80CCD(1B) up to 50,000 for NPS Tier 1 voluntary contribution over and above 80C
- Section 10(13A) HRA exemption using the three condition minimum rule
- Section 16(ia) standard deduction of 50,000 for salaried employees
- Section 24(b) home loan interest up to 2,00,000 for self occupied property
- Section 80E interest paid on education loan (no cap)
- Section 80G donations to eligible charitable institutions (50 or 100 percent of donation)
New Regime Deductions
- Section 16(ia) standard deduction of 75,000 for salaried employees
- Section 80CCD(2) employer contribution to NPS up to 14 percent of basic plus DA for central government employees and 10 percent for others
- Section 24(b) interest on let out property is allowed; self occupied property interest is not
- Section 80JJAA for employment generation (business income only)
HRA, 80C, 80D, and self occupied home loan interest are all off the table in the new regime.
Worked Examples at Five Income Levels
Each calculation assumes salaried income, standard deduction applied automatically, and typical old regime deductions where applicable: 80C of 1,50,000, 80D of 25,000, 80CCD(1B) of 50,000, and HRA exemption appropriate to the salary structure.
Example 1: Taxable Income 10,00,000 (Salaried, Metro)
Gross income: 12,50,000. HRA received: 3,00,000. Rent paid: 2,40,000. Basic: 6,25,000.
| Component | Old Regime | New Regime |
|---|---|---|
| Gross income | 12,50,000 | 12,50,000 |
| Standard deduction | 50,000 | 75,000 |
| HRA exemption | 1,77,500 | 0 |
| Section 80C | 1,50,000 | 0 |
| Section 80D | 25,000 | 0 |
| Section 80CCD(1B) | 50,000 | 0 |
| Taxable income | 7,97,500 | 11,75,000 |
| Tax before rebate | 71,750 | 67,500 |
| Section 87A rebate | 0 | 60,000 |
| Cess 4 percent | 2,870 | 300 |
| Total tax payable | 74,620 | 7,800 |
New regime wins by 66,820. The 87A rebate up to 12 lakh is decisive at this income level.
Example 2: Taxable Income 15,00,000 (Salaried, Metro)
Gross income: 17,00,000. HRA exemption claimed: 2,00,000. All other standard deductions.
| Component | Old Regime | New Regime |
|---|---|---|
| Gross income | 17,00,000 | 17,00,000 |
| Standard deduction | 50,000 | 75,000 |
| HRA exemption | 2,00,000 | 0 |
| 80C, 80D, 80CCD(1B) | 2,25,000 | 0 |
| Taxable income | 12,25,000 | 16,25,000 |
| Tax before cess | 1,80,000 | 1,45,000 |
| Cess 4 percent | 7,200 | 5,800 |
| Total tax payable | 1,87,200 | 1,50,800 |
New regime wins by 36,400 even after full deductions in the old regime.
Example 3: Taxable Income 25,00,000 (Salaried, Metro)
Gross income: 28,00,000. HRA 3 lakh, 80C 1.5 lakh, 80D 25,000, 80CCD(1B) 50,000.
| Component | Old Regime | New Regime |
|---|---|---|
| Gross income | 28,00,000 | 28,00,000 |
| All deductions | 5,75,000 | 75,000 |
| Taxable income | 22,25,000 | 27,25,000 |
| Tax before cess | 4,80,000 | 4,37,500 |
| Cess 4 percent | 19,200 | 17,500 |
| Total tax payable | 4,99,200 | 4,55,000 |
New regime still wins by 44,200.
Example 4: Taxable Income 50,00,000
Gross income: 55,00,000. Generous deductions in old: HRA 4 lakh, 80C 1.5 lakh, 80D 75,000 (with senior parents), 80CCD(1B) 50,000, home loan interest 2 lakh. Total: 8.75 lakh plus standard deduction.
| Component | Old Regime | New Regime |
|---|---|---|
| Gross income | 55,00,000 | 55,00,000 |
| Total deductions | 9,25,000 | 75,000 |
| Taxable income | 45,75,000 | 54,25,000 |
| Tax before surcharge | 11,52,500 | 12,47,500 |
| Surcharge 10 percent | 0 | 1,24,750 |
| Cess 4 percent | 46,100 | 54,890 |
| Total tax payable | 11,98,600 | 14,27,140 |
At 50 lakh with heavy deductions, the old regime wins by 2,28,540. The 10 percent surcharge kicks in at 50 lakh under the new regime, shifting the math.
Example 5: Taxable Income 1,00,00,000
Gross income: 1,10,00,000. Old regime deductions of 10 lakh (including home loan). Surcharge 15 percent applies in both regimes.
| Component | Old Regime | New Regime |
|---|---|---|
| Gross income | 1,10,00,000 | 1,10,00,000 |
| Total deductions | 10,50,000 | 75,000 |
| Taxable income | 99,50,000 | 1,09,25,000 |
| Tax before surcharge | 28,27,500 | 29,02,500 |
| Surcharge 15 percent | 4,24,125 | 4,35,375 |
| Cess 4 percent | 1,30,065 | 1,33,515 |
| Total tax payable | 33,81,690 | 34,71,390 |
Old regime wins by 89,700 at 1 crore with 10 lakh of genuine deductions.
Break Even Cheat Sheet
The regime that wins at each income level depends on total deductions claimed.
| Income Level | Deductions Needed for Old Regime to Win |
|---|---|
| Up to 12,00,000 | New regime always wins (87A rebate) |
| 15,00,000 | More than 4,37,500 of deductions in addition to standard |
| 25,00,000 | More than 6,12,500 of deductions |
| 50,00,000 | More than 7,87,500 of deductions (surcharge tips this) |
| 1,00,00,000 | More than 9,75,000 of deductions |
If you pay metro rent with a high basic, take home loan interest, and use the full 80C plus 80CCD(1B), the old regime often wins above 15 lakh. If you live in your own home, no HRA, and only claim 80C, the new regime wins at every income level.
Run your specific numbers on our income tax calculator to compare both regimes.
Surcharge and Cess Details
Surcharge slabs for FY 2026-27:
- 10 percent on tax if taxable income is between 50 lakh and 1 crore
- 15 percent on tax if between 1 crore and 2 crore
- 25 percent on tax if above 2 crore (new regime) or between 2 and 5 crore (old)
- 37 percent on tax above 5 crore (old regime only, not new)
Health and education cess of 4 percent applies on tax plus surcharge under both regimes.
Disclaimer
This article is informational only. The author is not a Chartered Accountant or SEBI registered advisor. Regime choice depends on your full income mix, deduction eligibility, and long term planning. Consult a Chartered Accountant before filing your ITR.
Byline: By Aniket Nigam. Verified 2026-04-15 against the Finance Act 2025, CBDT Circular No. 03/2026 dated 15 March 2026, and Sections 115BAC, 87A, 80C, 80D, 80CCD, 10(13A), 16(ia), 24(b) of the Income Tax Act. Methodology: tax at each income level computed slab by slab in both regimes, with standard deductions applied per statute.
Frequently Asked Questions
Q.What is the rebate limit under Section 87A for FY 2026-27?
Under the new tax regime introduced by Section 115BAC, the Section 87A rebate has been increased to cover taxable income up to 12,00,000 as per Finance Act 2025. The full rebate of up to 60,000 brings tax liability to zero for incomes at or below this threshold. Under the old regime, the rebate continues at 12,500 for taxable income up to 5,00,000.
Q.Which deductions are allowed under the new tax regime in FY 2026-27?
The new regime allows only two meaningful deductions: the standard deduction of 75,000 for salaried employees (Section 16(ia)), and employer NPS contribution up to 14 percent of basic plus DA under Section 80CCD(2). Popular deductions like Section 80C, 80D, HRA exemption, and home loan interest for self occupied property are not available.
Q.At what income level does the old regime beat the new regime?
The break even depends on your deduction profile. At 15 lakh taxable income, if you claim Section 80C of 1.5 lakh, Section 80CCD(1B) of 50,000, Section 80D of 25,000, and HRA exemption of 2 lakh, the old regime saves about 17,000 in tax. With only 80C of 1.5 lakh, the new regime wins at every income level from 10 lakh to 1 crore in most cases.
Q.What is the surcharge rate on high income under the new regime?
Surcharge rates under Section 115BAC for FY 2026-27: 10 percent on taxable income between 50 lakh and 1 crore, 15 percent between 1 crore and 2 crore, and 25 percent above 2 crore. The 37 percent surcharge for incomes above 5 crore was removed when the new regime was introduced, capping the top effective rate at 42.744 percent including cess. Under the old regime, the 37 percent surcharge still applies above 5 crore.
Q.Can I switch between regimes every year?
Salaried taxpayers can switch between the old and new regime every financial year by declaring their choice to the employer at the start of the year and filing the ITR under the chosen regime. Business income taxpayers can switch only once in a lifetime from the new regime back to the old regime, per Section 115BAC(6).