India Income Tax: New vs Old Regime Explained
Should you pick the new or old tax regime? Here's how India's income tax slabs, standard deduction, 87A rebate, and cess work — and how to compare.
Two regimes, one decision
India lets you choose between two income tax regimes:
- New regime — lower slab rates, but most deductions and exemptions are removed. Now the default.
- Old regime — higher slab rates, but you can claim deductions like 80C, HRA, and home loan interest.
The right choice depends on how many deductions you actually claim. The Income Tax Calculator lets you compare both side by side.
What's included in the maths
- Standard deduction for salaried individuals.
- Section 87A rebate, which can reduce tax to zero below a threshold.
- 4% Health & Education cess added on top of the tax.
A rule of thumb
If your deductions are small, the new regime usually wins. If you maximise 80C, HRA, and home loan interest, the old regime can come out ahead. Don't guess — run both.
How to use it
- Enter your annual income.
- Select a regime (or check each).
- The tool applies the slabs, standard deduction, 87A rebate, and cess to show your tax.
Try it
Open the Income Tax Calculator and compare regimes, then explore Pyalm's other free finance tools.