Old vs New Tax Regime Comparison
Compare your tax liability under both regimes with your actual salary, HRA, and all deductions. Find out which regime saves you more tax for FY 2024-25.
Salary details (Annual)
HRA details
Deductions (Old regime only)
Tax comparison
New regime saves you
₹ 4,940
Choose the New Tax Regime for FY 2024-25
Old Regime
Effective rate: 6.4%
New Regime
BetterEffective rate: 6.0%
Visual comparison
How to use this calculator
- 1Enter your gross annual salary (CTC) along with basic salary and HRA components.
- 2Add your annual rent paid and select whether you live in a metro city.
- 3Fill in your deductions — Section 80C, 80D, NPS, home loan interest.
- 4View the side-by-side comparison of tax under both regimes.
- 5Choose the regime that results in lower total tax for FY 2024-25.
Tax Slab Rates — Financial Year 2024-25 (AY 2025-26)
The Union Budget 2024 brought significant changes to the income tax slabs under the New Tax Regime, widening the brackets to provide more relief to the middle class. The Old Tax Regime slabs remain unchanged. Here is the exact side-by-side comparison of the tax rates:
Old Tax Regime (FY 24-25)
Rebate u/s 87A: Full tax waiver if net taxable income is ≤ ₹5,00,000.
New Tax Regime (FY 24-25)
Rebate u/s 87A: Full tax waiver if net taxable income is ≤ ₹7,00,000. Marginal relief applies just above 7L.
Understanding the Old vs New Tax Regime: A Complete Guide
Choosing between the Old and New Tax Regime is the most critical financial decision a salaried employee makes at the start of every financial year. The government fundamentally changed the tax code architecture to promote a deduction-free, lower-rate system. But which one actually leaves more cash in your bank account?
The Default Status of the New Regime
As of FY 2023-24, the New Tax Regime is the default regime. If you do not explicitly communicate to your employer (via your HR or payroll portal) that you wish to opt for the Old Regime, they will automatically calculate and deduct your TDS (Tax Deducted at Source) based on the New Regime slabs.
Fortunately, salaried individuals enjoy maximum flexibility. You can switch between the two regimes every single year when you file your Income Tax Return (ITR). If your employer deducted tax under the New Regime, but you realize while filing your ITR in July that the Old Regime saves you money, you can switch regimes and claim a massive refund. (Note: Freelancers and business owners under ITR-3/ITR-4 can only switch out of the New Regime once in their lifetime).
The Power of the ₹75,000 Standard Deduction
In a major relief for the salaried class, the Finance Minister increased the Standard Deduction from ₹50,000 to ₹75,000 under the New Tax Regime for FY 2024-25.
This creates the highly popularized ₹7.75 Lakh Zero-Tax Formula. If your gross salary is exactly ₹7,75,000, you immediately subtract the ₹75,000 standard deduction. Your Net Taxable Income becomes ₹7,00,000. Under the New Regime, income up to ₹7 Lakhs is eligible for a full rebate under Section 87A (worth up to ₹25,000 in tax). Therefore, you pay absolute zero tax.
When Does the Old Regime Win? (The Breakeven Math)
The New Regime strips away nearly 70 different deductions and exemptions. You cannot claim HRA, LTA, Section 80C (PPF, ELSS, Life Insurance), Section 80D (Health Insurance), or Section 24b (Home Loan Interest).
So, when should you stick to the Old Regime? Financial planners use a "Breakeven Point." As a general rule of thumb for FY 2024-25:
- If your total eligible deductions are less than ₹3.75 Lakhs, the New Regime is mathematically superior.
- If your total eligible deductions are more than ₹4 Lakhs, the Old Regime will save you more tax.
Getting to ₹4 Lakhs in deductions is difficult for a young professional, but very easy for someone in their 30s. If you max out Section 80C (₹1.5L), pay a home loan EMI (₹2L interest under Sec 24b), and pay health insurance premiums for your family and parents (₹50k under Sec 80D), you have easily crossed the ₹4 Lakh threshold. In this scenario, the Old Regime is your best friend.
The Surcharge Benefit for High Earners (>₹5 Crore)
If you are a high net-worth individual (HNI) earning a salary above ₹5 Crores, the New Regime has a hidden superpower. Under the Old Regime, the highest surcharge rate is 37%, pushing the peak effective tax rate to a punishing 42.74%. Under the New Regime, the highest surcharge is capped at 25%, bringing the peak effective tax rate down to 39%. For top executives and startup founders, the New Regime is the undisputed winner.