Budget 2026 kept the slabs introduced in Budget 2025, so the new regime is still the default and still charges nothing on taxable income up to ₹12 lakh. The old regime survives for people with large deductions. Whether yours are large enough is a number, not a feeling, and the table below puts it on the page.
All figures are from our income tax calculator for India for FY 2026-27 (AY 2027-28), salaried income, including the 4% health and education cess. The new regime applies its ₹75,000 standard deduction; the old regime applies ₹50,000 plus whatever extra deductions are stated.
Six salaries, three columns
| Gross salary | New regime | Old regime, no extra deductions | Old regime, ₹1.5 lakh of deductions |
|---|---|---|---|
| ₹6,00,000 | ₹0 | ₹23,400 | ₹0 |
| ₹8,00,000 | ₹0 | ₹65,000 | ₹33,800 |
| ₹10,00,000 | ₹0 | ₹1,06,600 | ₹75,400 |
| ₹12,00,000 | ₹0 | ₹1,63,800 | ₹1,17,000 |
| ₹15,00,000 | ₹97,500 | ₹2,57,400 | ₹2,10,600 |
| ₹20,00,000 | ₹1,92,400 | ₹4,13,400 | ₹3,66,600 |
The "₹1.5 lakh" column is the common case of a full Section 80C: PF, ELSS, life insurance premium, children's tuition. Even with it, the old regime loses at every salary in the table.
Why the new regime is zero to ₹12 lakh
The new-regime slabs start at 5% above ₹4 lakh and step up every ₹4 lakh, so a ₹12 lakh taxable income does carry ₹60,000 of slab tax. The Section 87A rebate then wipes out up to ₹60,000 for anyone whose taxable income is ₹12 lakh or less. With the ₹75,000 standard deduction, that means gross salary up to ₹12.75 lakh pays nothing.
Just above the line, marginal relief stops a small pay rise from costing more than it earns: tax is capped at the amount by which taxable income exceeds ₹12 lakh. The full slab tax only bites once income is far enough past the threshold for that cap to stop mattering, which is why ₹15 lakh pays ₹97,500 rather than a cliff-edge figure.
How many deductions the old regime needs
Take ₹15 lakh. The new regime charges ₹97,500. For the old regime to match it, taxable income has to fall to about ₹9.06 lakh, which after the ₹50,000 standard deduction means roughly ₹5.4 lakh of additional deductions. A full 80C is ₹1.5 lakh. Add ₹50,000 of NPS under 80CCD(1B) and ₹25,000 of health premiums under 80D and you are at ₹2.25 lakh. The remaining ₹3.2 lakh has to come from HRA exemption or home-loan interest under Section 24, which is why the old regime now mainly suits people paying high rent in a metro or servicing a large home loan.
At ₹20 lakh the gap is wider: ₹1,92,400 versus ₹3,66,600 with ₹1.5 lakh of deductions, so the deduction total needed to break even is higher still.
What the switch costs you
Choosing the new regime does not cancel the underlying investments. PF still accrues, the home loan still gets paid, the insurance still covers you. What you give up is the deduction, not the asset. For most salaried people the arithmetic is: keep the investments you would make anyway, take the lower tax, and stop buying products whose only case was the 80C line.
Salaried employees can choose the regime each year when filing. If you have business income the choice to leave the new regime can only be made once, so run the numbers with more care.
Beyond the tax line
Take-home is tax plus EPF. The CTC to in-hand calculator starts from a CTC offer and deducts both, which is the figure that matters when comparing job offers. And if the tax saving from the new regime frees up a few thousand a month, the SIP calculator will show what a systematic investment of that amount grows to, which is the more useful place for it than an 80C product bought for the deduction.