Old vs New Tax Regime Calculator 2026: Compare Tax & In-Hand Salary
Tax Liability & Monthly In-Hand Salary Comparison
Tax & In-Hand Salary Slabs Comparison Table
| ANNUAL CTC | NEW REGIME TAX | NEW IN-HAND / MO | OLD REGIME TAX | BEST REGIME WINNER |
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1. New Tax Regime vs Old Tax Regime: Major Differences
The Government of India introduced the New Tax Regime as the default tax system with lower tax slab rates across income brackets. However, to benefit from lower tax rates under the new regime, taxpayers must forego traditional tax deductions like Section 80C (PPF, ELSS, EPF), Section 80D (Health Insurance), and HRA exemptions.
Conversely, the Old Tax Regime offers higher tax slab rates but permits taxpayers to claim extensive deductions under Chapter VI-A to significantly lower their net taxable income.
2. SVG Visual Guide: Tax Slabs FY 2025-26 Comparison
The revised tax slabs under the New Tax Regime feature a flat ₹75,000 standard deduction for salaried employees, raising the effective tax-free income limit to ₹7.75 Lakhs under Section 87A rebate rules.
3. What is the Break-Even Deduction Threshold?
The Break-Even Deduction Threshold is the minimum amount of exemptions you must claim under the Old Regime for it to yield lower tax than the New Regime:
- ₹7.5 Lakhs to ₹10 Lakhs CTC: Break-even threshold is approximately ₹2.12 Lakhs to ₹2.62 Lakhs in total exemptions.
- ₹12 Lakhs to ₹15 Lakhs CTC: Break-even threshold is approximately ₹3.00 Lakhs to ₹3.75 Lakhs in total exemptions.
- Above ₹15 Lakhs CTC: Break-even threshold is ₹3.75 Lakhs. If your total exemptions (80C + 80D + HRA + NPS) exceed ₹3.75 Lakhs, the Old Regime saves more tax.
4. Section 87A Rebate: Zero Tax Limit Explained
Under the New Tax Regime, taxpayers with a net taxable income up to ₹7,00,000 receive a full tax rebate of up to ₹25,000 under Section 87A. Combined with the flat ₹75,000 standard deduction, salaried individuals earning up to ₹7,75,000 annual CTC pay ₹0 tax!
5. Step-by-Step Salary Calculation Example
Let's consider a salaried employee with a ₹12,00,000 (₹12 Lakhs) annual CTC:
- New Regime Tax Calculation:
Gross CTC = ₹12,00,000 - ₹75,000 (Std Deduction) = ₹11,25,000 Taxable Income.
Tax Calculation: Slabs 0-3L (Nil) + 3-7L (₹20,000) + 7-10L (₹30,000) + 10-11.25L (₹18,750) = ₹68,750 + 4% Cess = ₹85,800 Total Tax. - Old Regime Tax Calculation (With ₹3.95L Exemptions):
Gross CTC = ₹12,00,000 - ₹50,000 (Std Ded) - ₹1.5L (80C) - ₹1.2L (HRA) - ₹25k (80D) - ₹50k (NPS) = ₹7,55,000 Taxable Income.
Tax Calculation: Slabs 0-2.5L (Nil) + 2.5-5L (₹12,500) + 5-7.55L (₹51,000) = ₹63,500 + 4% Cess = ₹80,600 Total Tax. - Result: Old Regime saves ₹5,200 in tax in this scenario!
6. Frequently Asked Questions (FAQs)
Can I switch between Old and New Tax Regimes every year?
Yes, salaried employees without business income can freely switch between the Old and New Tax Regimes every financial year when filing their ITR return.
Is Section 80C available in the New Tax Regime?
No, popular deductions under Chapter VI-A such as Section 80C (PPF, ELSS, EPF), Section 80D (Health Insurance), and HRA are not allowed under the New Tax Regime.
What is the standard deduction for salaried employees in 2026?
Under the New Tax Regime, the standard deduction for salaried employees and pensioners is flat ₹75,000 per year. Under the Old Tax Regime, it remains ₹50,000.
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