Income Tax Slabs for FY 2025-26: Old Regime vs New Regime Compared
2025-10-05 7 min read
Should you choose the old or new income tax regime in 2025-26? We compare slabs, deductions, and effective rates across different income levels to help you decide.
India's dual tax regime — Old and New — has been in place since 2020. For FY 2025-26, the new regime has been updated with revised slabs and a higher basic exemption limit. Here's a complete comparison to help you decide which regime saves more tax.
New Tax Regime Slabs (FY 2025-26)
- Up to ₹3 lakh: Nil
- ₹3–7 lakh: 5%
- ₹7–10 lakh: 10%
- ₹10–12 lakh: 15%
- ₹12–15 lakh: 20%
- Above ₹15 lakh: 30%
- Rebate under 87A: Full tax rebate up to ₹12 lakh income (tax = 0)
Old Tax Regime Slabs
- Up to ₹2.5 lakh: Nil
- ₹2.5–5 lakh: 5%
- ₹5–10 lakh: 20%
- Above ₹10 lakh: 30%
- Rebate under 87A: Up to ₹5 lakh income (tax = 0)
Key Deductions in Old Regime (Not Available in New)
- Section 80C: Up to ₹1.5 lakh (PPF, ELSS, life insurance, home loan principal)
- Section 80D: Health insurance premium
- HRA: House Rent Allowance exemption
- Standard Deduction: ₹50,000
- Home loan interest (Section 24): Up to ₹2 lakh
New Regime Advantages
- Standard deduction of ₹75,000 (increased in Budget 2024)
- No need to maintain investment proofs
- Lower effective rates at most income levels
Which Regime is Better for You?
The crossover point depends on your deductions. If you have significant 80C, HRA, and home loan deductions totaling ₹3–4 lakh+, the old regime may still be better. Calculate both and compare. Most salaried individuals with income below ₹15 lakh and standard investments save more under the new regime in 2025-26.