New vs Old Tax Regime Calculator 2025

The new tax regime was introduced in Union Budget 2020 to simplify income tax filing in India. It offers lower tax rates across all income slabs but removes most deductions and exemptions available under the old regime. For FY 2024-25 (Assessment Year 2025-26), the new regime has become more attractive with enhanced benefits.

Starting from FY 2023-24, the new tax regime is the default option for all taxpayers. This means if you don't explicitly choose the old regime, you'll automatically be taxed under the new regime. Understanding both options helps you make an informed choice that minimizes your tax liability.

To understand how taxes affect your actual salary, use our CTC to In-Hand Salary Calculator which factors in tax deductions along with PF and other statutory deductions.

Here's a comprehensive comparison of tax slabs under both regimes for FY 2024-25:

For detailed tax calculation, use our Income Tax Calculator.

The old tax regime becomes advantageous when your total deductions and exemptions are substantial. Here are scenarios where old regime saves more tax:

• 1
  You maximize Section 80C investments - ₹1.5 lakh in PPF, ELSS, LIC, home loan principal, children's tuition fees. Calculate your deductions with Section 80C Calculator.
• 2
  Significant health insurance premiums - Section 80D allows up to ₹25,000 for self and family, plus ₹50,000 for senior citizen parents.
• 3
  You claim HRA exemption - If you pay rent, especially in metro cities, HRA exemption can save significant tax.
• 4
  Home loan interest payment - Section 24(b) allows up to ₹2 lakh deduction for home loan interest.
• 5
  Additional NPS investment - Section 80CCD(1B) allows extra ₹50,000 deduction for NPS.

The new tax regime is beneficial for taxpayers with minimal deductions or those who prefer simplicity:

• You don't have significant tax-saving investments under 80C
• You don't pay rent or HRA is not part of your salary structure
• You don't have a home loan
• Your employer already contributes to NPS (which is allowed in new regime)
• You prefer simple tax filing without tracking multiple deductions
• Your income is below ₹7 lakh (zero tax with 87A rebate)

For income up to ₹7.75 lakh (₹7 lakh + ₹75,000 standard deduction), the new regime results in zero tax liability due to Section 87A rebate. This makes it attractive for freshers and young professionals. Check your In-Hand Salary after tax in both scenarios.

Understanding available deductions helps you choose the right regime. Here are the major deduction categories:

Here's a general guideline based on different salary levels:

Calculate your exact CTC to In-Hand salary with tax deduction under both regimes to make an informed decision.

Salaried employees have flexibility to switch between tax regimes:

1. For TDS Calculation: Inform your employer at the beginning of financial year (April) about your preferred regime. Most companies send a declaration form.
2. While Filing ITR: You can choose either regime regardless of what you declared to employer. Any excess TDS deducted will be refunded.
3. Switching Frequency: Salaried employees can switch every year. No restrictions on how often you change.