What are the income tax slabs for FY 2025-26 under the new regime?

New regime slabs (FY2025-26): ₹0–3L: 0%, ₹3–7L: 5%, ₹7–10L: 10%, ₹10–12L: 15%, ₹12–15L: 20%, above ₹15L: 30%. A standard deduction of ₹75,000 applies. Income up to ₹12L is effectively tax-free due to rebate under 87A.

Should I choose the new or old tax regime?

The new regime is better if your total deductions (80C, HRA, 80D, home loan interest etc.) are below ₹3.75 lakh. If your deductions exceed this threshold, the old regime typically saves more tax. Use the calculator to compare your exact situation.

What deductions are allowed under the new tax regime?

The new regime allows very few deductions: standard deduction of ₹75,000 (salaried), NPS employer contribution (Section 80CCD(2)), and a few others. Most popular deductions like 80C (PPF, ELSS), HRA, 80D (health insurance), and home loan interest are not available.

Is there zero tax on income up to ₹12 lakh?

Effectively yes, for resident individuals under the new regime in FY2025-26. The rebate under Section 87A makes tax payable zero for taxable income up to ₹12 lakh (after standard deduction of ₹75,000, meaning gross salary up to ₹12.75L can be tax-free).

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

Salaried individuals can switch between regimes every year. However, individuals with business income can switch from new to old only once and cannot switch back.

TOOLS April 25, 2026 · 8 min read

Income Tax Calculator 2025-26: New vs Old Regime — Which Saves You More?

By Moneykar Team ·Finance Education · LinkedIn

Use Moneykar's income tax calculator for FY 2025-26 to compare the new and old tax regimes side by side. Find out which regime saves you more tax based on your salary, HRA, and deductions.

⚠️ Educational content only. This article is for informational purposes and does not constitute financial advice. Consult a SEBI-registered advisor before making investment decisions. Full disclaimer →

The biggest financial decision most salaried Indians make each year isn't about investments — it's about which income tax regime to choose. The wrong choice can cost thousands of rupees. Moneykar's income tax calculator lets you enter your salary, deductions, and HRA to instantly compare your tax liability under both regimes.

New vs Old Tax Regime: the key difference

The new regime offers lower slab rates and a ₹75,000 standard deduction but strips away most exemptions and deductions. The old regime has higher slab rates but lets you claim HRA, 80C investments, home loan interest, 80D health insurance, and many other deductions that can significantly reduce taxable income.

Feature	New Regime (FY2025-26)	Old Regime
Standard deduction	₹75,000	₹50,000
80C (PPF, ELSS, LIC)	Not available	Up to ₹1.5L
HRA exemption	Not available	Available
80D (health insurance)	Not available	Up to ₹25,000–₹50,000
Home loan interest (24b)	Not available	Up to ₹2L
Zero tax threshold	Up to ₹12L (effective)	Up to ₹5L (rebate 87A)

How to use Moneykar's Income Tax Calculator

Enter your annual gross salary.
Add any other income (rent, interest, freelance).
Enter your deductions (80C, HRA, 80D, home loan interest, NPS).
The calculator shows your tax under both regimes side by side — pick the lower one.

→ Open Income Tax Calculator

New regime slab rates for FY2025-26

Taxable Income	New Regime Rate	Old Regime Rate
Up to ₹3,00,000	Nil	Nil
₹3L – ₹7L	5%	5% (₹2.5L–₹5L)
₹7L – ₹10L	10%	20% (₹5L–₹10L)
₹10L – ₹12L	15%	30%
₹12L – ₹15L	20%	30%
Above ₹15L	30%	30%

Who benefits most from the new regime?

Young professionals with minimal deductions (no home loan, no HRA in own city, no large 80C investments)
High earners above ₹15L who don't have deductions anywhere near ₹5–6L
Freelancers and self-employed individuals whose deductions are already captured in expenses

Who benefits more from the old regime?

Salaried employees claiming large HRA (paying rent in metros)
Home loan borrowers claiming ₹2L interest deduction under Section 24(b)
Those maximising 80C (₹1.5L), 80D (₹25–50K), and NPS (₹50K under 80CCD(1B))

Frequently Asked Questions

Is income up to ₹12 lakh really tax-free in FY2025-26?

Effectively yes under the new regime. After the ₹75,000 standard deduction and Section 87A rebate, individuals with gross income up to ₹12.75 lakh pay zero income tax.

Which regime is better for ₹10 lakh salary?

At ₹10L salary with typical deductions (₹1.5L 80C + ₹25K 80D + ₹1L HRA), the old regime typically saves more tax. Without these deductions, the new regime wins. Use the calculator to verify your specific scenario.

What deductions are allowed in the new tax regime?

Standard deduction (₹75,000), employer NPS contribution (80CCD2), gratuity exemption, leave encashment, and a few others. Most popular deductions (80C, HRA, 80D, home loan interest) are not available.

Can I change tax regime after filing returns?

No. Once you file your return for a financial year under a particular regime, you cannot change it for that year. However, salaried individuals can inform their employer to change the regime for the next financial year.

How do I save tax if I choose the new regime?

Maximise employer NPS contribution (80CCD2 — no limit beyond 10% of basic), claim standard deduction, and explore NPS through employer's salary structure. Investments like ELSS, PPF, and insurance don't save tax under the new regime but still help build wealth.

Use Income Tax Calculator →

Moneykar Team

Independent Finance Education · 15+ yrs Industry Experience

Content generated with AI and reviewed for accuracy by our finance team. About Moneykar → · LinkedIn

🤖 AI Disclosure: This article was produced using AI assistance and reviewed by the Moneykar team for factual accuracy and editorial standards. All content is for educational purposes only — not financial advice.

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