About this tool
The Regime Comparator shows tax under both regimes for your income and tells you the break-even deduction amount - the threshold above which Old Regime starts winning.
How it works
- Enter annual gross income.
- Enter total Old Regime deductions you can claim.
About the regime comparator
India's income tax now offers two parallel systems. The New Tax Regime, which is the default, applies lower slab rates but strips away almost every deduction and exemption. The Old Tax Regime keeps higher rates but lets you subtract a long list of deductions, from Section 80C investments to HRA and home-loan interest. The right choice is not universal: it flips depending on how much you can actually claim.
This comparator computes your tax under both regimes for a given gross income and total deductions, then reports the difference and the break-even deduction, the exact amount of deductions at which the two regimes cost the same. That single number is the decision-maker: claim more than the break-even and the Old Regime wins; claim less and the New Regime wins.
How it works: the logic
Each regime taxes a different base. The New Regime taxes nearly your full income at gentler rates; the Old Regime taxes income after deductions at steeper rates. Setting the two tax amounts equal and solving for deductions gives the break-even.
Tax_new = slab_tax(Gross, new rates) - rebate Tax_old = slab_tax(Gross - Deductions, old rates) - rebate Break-even: choose Deductions so that Tax_old = Tax_new Old Regime wins when Deductions > break-even
- Gross income = annual salary or total income before any deductions.
- Deductions = the sum of Old-Regime claims: 80C, HRA, 24(b) home-loan interest, 80D, NPS, and the standard deduction.
- Rebate = the Section 87A rebate, which can zero out tax below a threshold (higher under the New Regime).
- Cess = a 4 percent health and education cess applied on top of the computed tax in both regimes.
Worked example
Suppose a salaried taxpayer's New-Regime tax on their income works out to 1,20,000, and under the Old Regime each rupee of deduction sits in the 20 percent slab. How many deductions are needed to break even?
- Old-Regime tax before deductions on the same income is, say, 1,70,000.
- Gap to close: 1,70,000 minus 1,20,000 = 50,000 of tax.
- Deduction value: in a 20 percent slab, each 1 rupee deducted saves 0.20 in tax.
- Break-even deductions: 50,000 / 0.20 = 2,50,000.
- Decision: if this person can claim more than 2.5 lakh in deductions, the Old Regime is cheaper; if not, the New Regime wins.
Old vs New regime at a glance
The structural trade-offs, independent of any single year's slab numbers.
| Feature | Old Regime | New Regime |
|---|---|---|
| Slab rates | Higher | Lower |
| Section 80C (PPF, ELSS, EPF) | Allowed | Not allowed |
| HRA exemption | Allowed | Not allowed |
| Home-loan interest (24b) | Allowed | Not allowed (self-occupied) |
| Standard deduction | Allowed | Allowed |
| Default option | Must opt in | Default |
| Best for | High deductions | Few deductions |
Common pitfalls
- Assuming one regime is always better. The winner depends entirely on your deductions versus the break-even, which shifts with income.
- Counting deductions you cannot prove. Only claim 80C, HRA, and interest you can actually substantiate; inflated figures collapse under scrutiny and change the comparison.
- Forgetting the New Regime is the default. If you do not actively choose the Old Regime at filing, tax is computed under the New Regime automatically.
- Business-income lock-in. Unlike salaried filers, those with business income cannot freely switch back and forth, so the decision carries more weight.
- Ignoring the rebate threshold. Below the Section 87A rebate limit tax can be nil, which often makes the New Regime the obvious pick regardless of deductions.
Frequently asked questions
What is the break-even deduction between the Old and New tax regimes?
The break-even is the total amount of deductions at which both regimes produce the same tax. Below it the New Regime usually wins because of its lower rates; above it the Old Regime wins because each extra deduction reduces taxable income. The exact figure depends on your income level, which is why the calculator computes it for your specific salary rather than quoting a single number.
Can I switch between the Old and New regime every year?
Salaried taxpayers can choose afresh each year when filing their return, so you can move between regimes annually as your deductions change. Taxpayers with business or professional income face a stricter rule: once they opt out of the New Regime they can generally return to it only once, so the choice is far less flexible.
Which deductions are allowed only under the Old Regime?
The Old Regime lets you claim the big ones the New Regime removes: Section 80C investments such as PPF, ELSS, and EPF, HRA exemption under Section 10(13A), home-loan interest under Section 24(b), 80D medical insurance, and 80CCD(1B) NPS. The New Regime trades all of these away in exchange for lower slab rates and a higher rebate threshold.
Is the New Tax Regime the default now?
Yes. The New Tax Regime is the default option, so if you do not actively choose the Old Regime when filing, your tax is computed under the New Regime. Salaried taxpayers who benefit from heavy deductions must consciously opt for the Old Regime each year to keep those benefits.
How do I decide which regime saves me more?
Add up every deduction you can realistically claim (80C, HRA, home-loan interest, 80D, NPS) and compare that total against the break-even for your income. If your deductions exceed the break-even, the Old Regime saves more; if they fall short, the New Regime wins. Entering both figures into this comparator gives you the exact rupee difference.