New vs Old Tax Regime in India (FY 2025–26): Which Should You Pick?
Compare India's new and old income tax regimes for FY 2025-26. Understand slabs, Section 87A rebate, 80C, 80D, and when each regime wins.
By Plynt Team
Every salaried Indian faces the same annual question: stick with the new tax regime (lower slabs, fewer deductions) or switch to the old regime (higher slabs, full deductions under 80C, 80D, HRA, home loan interest)?
New regime highlights (FY 2025–26)
- Standard deduction of ₹75,000 for salaried employees
- Section 87A rebate — zero tax up to ₹12 lakh taxable income (with conditions)
- Marginal relief prevents cliff effects near rebate thresholds
- No 80C, 80D, HRA, or home loan interest deductions
When the old regime wins
- High HRA in metro cities with actual rent paid
- Home loan interest + principal under 80C cap
- Full ₹1.5L 80C (EPF, PPF, ELSS, life insurance)
- Significant 80D health insurance premiums for family + parents
- NPS additional ₹50,000 under 80CCD(1B)
When the new regime wins
- Limited deductions — no home loan, minimal 80C
- Income mostly in lower slabs with rebate benefit
- Simplicity — no proof collection for most deductions
Tax law changes. Always verify final liability with your CA before filing — Plynt estimates are for planning, not filing.
Disclaimer: This article is for educational purposes only. Plynt does not provide investment, tax, or legal advice. Consult a qualified professional before making financial decisions.
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