For FY 2026-27, neither regime is automatically better. The right choice depends on your deductions, salary structure, and whether the new-regime rebate can keep your tax at zero after the standard deduction.
The worked examples on this page are calculated for AY 2027-28, which is the assessment year for FY 2026-27.
In practical terms, the new regime usually wins when your deduction stack is light, because it gives salaried users a higher standard deduction and a much wider Section 87A rebate window. The old regime starts pulling ahead only when HRA, Section 80C, Section 80D, and home-loan interest combine into a large enough deduction stack. This page is written for salaried users with slab-taxed income, not for complex business-income or capital-gains cases.
Tax Compliance Update: Effective April 1, 2026, new rules mandate quoting a PAN card for cash deposits and withdrawals exceeding ₹10 Lakh aggregate per year across all accounts. Read our full guide on the New PAN Rules for Bank Cash Transactions.
| Situation | Likely winner | Why |
|---|---|---|
| Very few deductions or proofs to claim | New regime | Lower slabs, a ₹75,000 standard deduction, and the ₹60,000 rebate window make the new regime hard to beat when deductions are light. |
| Salary near ₹12 lakh with low deductions | New regime | Taxable income can stay within the Section 87A rebate limit after the new-regime standard deduction. |
| Large HRA exemption plus full 80C and 80D use | Old regime | Once rent-driven HRA and deduction buckets stack up, the old regime can push taxable income down faster than the new-regime slab benefit. |
| Home-loan interest and 80C, but no big HRA | Depends | Home-loan interest helps the old regime, but it often needs HRA or other deductions alongside it to flip the result. |
These rule checks use AY 2027-28, the filing year that corresponds to FY 2026-27.
| Rule | Old regime | New regime | What it means |
|---|---|---|---|
| Standard deduction | ₹50,000 | ₹75,000 | Available in both regimes, but higher under the new regime. |
| Section 80C | Up to ₹1,50,000 | Not available | Employee PF and eligible investments share the old-regime 80C cap. |
| Section 80D | Up to ₹25,000 for self/family | Not available | Parents and senior-citizen limits can push the old-regime deduction higher. |
| HRA exemption | Available | Not available | Large HRA exemptions are one of the strongest old-regime levers for salaried users. |
| Home-loan interest (Section 24B) | Up to ₹2,00,000 | Not available | Helpful, but often not enough by itself to beat the new regime. |
| Section 87A rebate | ₹12,500 up to ₹5,00,000 taxable income | ₹60,000 up to ₹12,00,000 taxable income | This is the biggest reason many low-deduction salaries land at zero tax under the new regime. |
These examples use the same tax engine as the calculator, so the winner and savings numbers stay aligned with the AY 2027-28 (FY 2026-27) rules already tested in the repo.
₹12 lakh salary with no meaningful HRA, 80C, 80D, or home-loan claims.
| Measure | Old regime | New regime |
|---|---|---|
| Salary income | ₹12,00,000 | ₹12,00,000 |
| Taxable income | ₹11,50,000 | ₹11,25,000 |
| Total tax | ₹1,63,800 | ₹0 |
₹15 lakh salary with full Section 80C, full self/family Section 80D, and a large HRA exemption from metro rent.
| Measure | Old regime | New regime |
|---|---|---|
| Salary income | ₹15,00,000 | ₹15,00,000 |
| Taxable income | ₹8,25,000 | ₹14,25,000 |
| Total tax | ₹80,600 | ₹97,500 |
₹16 lakh salary with full Section 80C and ₹2 lakh of self-occupied home-loan interest, but no major HRA exemption.
| Measure | Old regime | New regime |
|---|---|---|
| Salary income | ₹16,00,000 | ₹16,00,000 |
| Taxable income | ₹12,00,000 | ₹15,25,000 |
| Total tax | ₹1,79,400 | ₹1,13,100 |
For salaried users with very light deductions, the new regime is usually better at ₹12 lakh salary because the ₹75,000 standard deduction can bring taxable income within the new-regime Section 87A rebate window. If your HRA and deductions are substantial, compare both before deciding.
Usually yes. When you do not have much HRA, Section 80C, Section 80D, or home-loan interest to claim, the new regime often wins because it combines lower slabs with a higher standard deduction.
Salaried employees usually review the choice each financial year for TDS and final filing, but taxpayers with business or professional income can face different restrictions. Treat this guide as a salaried-user explainer and verify the final filing rule that applies to you.
Not automatically. A self-occupied home-loan interest deduction helps only under the old regime, but by itself it may still not beat the new regime if the rest of your deduction stack is small.
Yes. For salaried income in AY 2027-28 (FY 2026-27), the old regime uses a ₹50,000 standard deduction and the new regime uses a ₹75,000 standard deduction.
No, not in the usual salaried comparison. Section 80C deductions such as EPF, PPF, ELSS, and LIC mainly matter under the old regime. That is why a full 80C bucket often improves the old-regime case materially.
No. HRA is one of the biggest reasons the old regime can still win for salaried employees paying meaningful rent, especially in metro cities.
Yes. Your employer portal usually needs a TDS choice, but the better regime depends on your actual deduction stack. A quick comparison is worth doing before locking the year’s payroll preference.
This guide is for informational purposes only. Results depend on your actual salary structure, deductions, and filing position, so verify final tax decisions with official sources and a qualified tax professional.