The honest answer: it depends on your deductions
If you've been told "the new regime is always better," that's only half true. It's better for most people because most people don't claim big deductions. The moment you do — a home loan, full 80C, serious rent — the maths can swing the other way.
Think of it as a simple trade. The new regime hands you lower rates and a generous ₹12 lakh rebate, but takes away almost every deduction. The old regime keeps the deductions but charges more on whatever income is left. Whoever wins depends entirely on how much you can legitimately knock off your income.
When the new regime usually wins
You keep it simple
You rent modestly or own outright, your 80C is small, and you'd rather not chase receipts. For a salary up to around ₹12.75 lakh you'll likely pay zero, which the old regime can't match.
You claim a lot
Full ₹1.5 lakh under 80C, ₹2 lakh home loan interest, real HRA and health insurance. Stack those and the old regime's higher rates can still come out cheaper.
A rough break-even to keep in mind
Here's a shortcut seasoned filers use. Under the old regime you'd need total deductions somewhere in the region of ₹3.5 to ₹4 lakh (including the standard deduction) just to match what the new regime gives you for free at middle incomes. If your genuine deductions fall short of that, the new regime almost always wins.
On a ₹15 lakh salary, a person with only ₹1 lakh of deductions is clearly better off on the new regime. Give them ₹4 lakh of deductions — big home loan, full 80C, HRA — and the old regime pulls ahead. Between those two points is the break-even, and it's different for every salary.
Rather than guess where you land, put your figures into the calculator, switch the toggle, and read the "saves you ₹…" line. It does the break-even for your exact case in a second.
Side-by-side for a ₹15 lakh salary
Numbers make it concrete. Here's the same ₹15 lakh salary under both regimes, first with minimal deductions and then with a full set.
| Scenario | New regime | Old regime |
|---|---|---|
| Only standard deduction | ~₹97,000 | ~₹2,26,000 |
| + ₹1.5L 80C | ~₹97,000 | ~₹1,80,000 |
| + 80C, ₹2L home loan, ₹50k 80D | ~₹97,000 | ~₹1,02,000 |
| + 80C, home loan, 80D, ₹1.5L HRA | ~₹97,000 | ~₹57,000 |
Notice the new-regime figure never moves — deductions don't apply there. The old regime only overtakes it once the deductions pile up. Figures are rounded estimates; run yours on the calculator.
Things people get wrong
- Assuming you're locked in. Salaried taxpayers can choose afresh each year. Your choice last year doesn't bind you this year.
- Forgetting the standard deduction differs. It's ₹75,000 on the new regime but only ₹50,000 on the old — a quiet point in the new regime's favour.
- Counting deductions you won't actually make. A deduction only helps if you truly spend or invest the money. Don't pick the old regime for an 80C you never fill.
Keep exploring
Frequently asked questions
Can I switch between the old and new regime every year?
Yes, salaried individuals can choose their regime afresh each financial year while filing. Those with business income have more restrictions on switching back and forth.
Is the new regime better for a 15 lakh salary?
With few deductions, yes — the new regime is clearly cheaper on a 15 lakh salary. But with a full set of deductions (80C, home loan interest, HRA, 80D), the old regime can end up lower. Compare both on the calculator.
Which regime gives a higher standard deduction?
The new regime, at 75,000, compared with 50,000 under the old regime. This is one reason the new regime is hard to beat for salaried people with modest deductions.