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Chirag Singhal's blog
Personal Finance · 4 min read

Part 8: New Tax Regime vs Old Tax Regime — The Final Verdict

Side-by-side comparison of India's two tax regimes with real salary breakdowns at ₹10L, ₹15L, ₹25L, and ₹50L. Find out which one saves you more.

Part 8: New Tax Regime vs Old Tax Regime — The Final Verdict

This is the question every salaried Indian asks: “Which regime should I choose?” Let’s settle it once and for all with real numbers.


📊 Feature-by-Feature Comparison

FeatureNew RegimeOld Regime
Tax RatesLowerHigher
Standard Deduction₹75,000₹50,000
Section 80C (₹1.5L)❌ Not Available✅ Available
Section 80D (Health)❌ Not Available✅ Available
HRA Exemption❌ Not Available✅ Available
Home Loan Interest (Sec 24)❌ Not Available✅ Available
LTA Exemption❌ Not Available✅ Available
NPS 80CCD(1B) ₹50K❌ Not Available✅ Available
NPS Employer 80CCD(2)✅ Available✅ Available
Section 87A Rebate₹12L threshold₹5L threshold
Simplicity✅ Very Simple❌ Complex

💰 Case Study 1: Gross Income ₹10 Lakhs

New Regime

  • Gross: ₹10,00,000
  • Standard Deduction: ₹75,000
  • Taxable: ₹9,25,000
  • Tax (using slabs): ₹0 + ₹20,000 (5% on 4-8L) + ₹12,500 (10% on 8-9.25L) = ₹32,500
  • Section 87A Rebate: ₹32,500 (full rebate since taxable < ₹12L)
  • Tax Payable: ₹0

Old Regime

  • Gross: ₹10,00,000
  • Standard Deduction: ₹50,000
  • 80C: ₹1,50,000 (EPF + ELSS)
  • 80D: ₹25,000
  • Taxable: ₹7,75,000
  • Tax: ₹12,500 (5% on 2.5-5L) + ₹55,000 (20% on 5-7.75L) = ₹67,500
  • Section 87A Rebate: ₹0 (taxable > ₹5L)
  • Cess 4%: ₹2,700
  • Tax Payable: ₹70,200

Winner at ₹10L: New Regime by ₹70,200 🏆


💰 Case Study 2: Gross Income ₹15 Lakhs

New Regime

  • Taxable: ₹14,25,000 (after ₹75K SD)
  • Tax: ₹0 + ₹20,000 + ₹40,000 + ₹33,750 = ₹93,750
  • No rebate (taxable > ₹12L)
  • Cess: ₹3,750
  • Tax Payable: ₹97,500

Old Regime (with HRA ₹18K rent/month in Bangalore)

  • HRA Exempt: ₹1,56,000
  • SD: ₹50,000
  • 80C: ₹1,50,000
  • 80D: ₹30,000
  • NPS 80CCD(1B): ₹50,000
  • Taxable: ₹15,00,000 - ₹4,36,000 = ₹10,64,000
  • Tax: ₹12,500 + ₹1,12,800 = ₹1,25,300
  • Cess: ₹5,012
  • Tax Payable: ₹1,30,312

Winner at ₹15L: New Regime by ₹32,812 🏆


💰 Case Study 3: Gross Income ₹25 Lakhs

New Regime

  • Taxable: ₹24,25,000
  • Tax: ₹20K + ₹40K + ₹60K + ₹80K + ₹1,00K + ₹6,250 = ₹3,06,250
  • Cess: ₹12,250
  • Tax Payable: ₹3,18,500

Old Regime (with HRA + Home Loan + NPS)

  • HRA: ₹2,40,000
  • SD: ₹50,000
  • 80C: ₹1,50,000
  • 80D: ₹50,000 (senior citizen parents)
  • NPS: ₹50,000
  • Home Loan Interest: ₹2,00,000
  • Taxable: ₹25,00,000 - ₹7,40,000 = ₹17,60,000
  • Tax: ₹12,500 + ₹1,00,000 + ₹2,28,000 = ₹3,40,500
  • Cess: ₹13,620
  • Tax Payable: ₹3,54,120

Winner at ₹25L: New Regime by ₹35,620 🏆


💰 Case Study 4: Gross Income ₹50 Lakhs

At ₹50L with maximum deductions (HRA ₹3.6L + 80C ₹1.5L + 80D ₹75K + NPS ₹50K + Home Loan ₹2L + LTA ₹50K), the Old Regime can bring taxable income down to ~₹41L.

At this level, the math becomes very close. You need to run a calculator with your exact numbers. Generally, the New Regime still wins unless your total deductions exceed ₹10 Lakhs.


🎯 The Simple Rule of Thumb

  • Income below ₹12.75L: Always New Regime (zero tax).
  • Income ₹12.75L to ₹30L: New Regime wins for most people unless you have HRA + Home Loan + NPS + 80D for senior parents.
  • Income above ₹30L: Calculate both. Old Regime MAY win if deductions exceed ₹10L.
  • Switching: Salaried employees can switch regimes every year. Choose wisely during your annual declaration.

Next: Part 9 — ITR Filing Guide →


Part 7 | Index | Part 9 →

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