Tax · 9 min read
Old vs New tax regime — which one should you actually pick?
The new regime is the default in 2026. But for many salaried Indians with 80C, HRA and home-loan EMIs, the old regime still wins. Here's the test.
Krish Dalal
Founder and editor, PaisaExpert. Master's in Business Management, SP Jain School of Global Management, London. · Last updated 2026-05-10
Since FY 2023-24, the new tax regime is the default. Most salaried Indians blindly accept it because their HR didn't ask. For anyone with significant HRA, 80C and 80D, the old regime can save ₹30,000-80,000 a year. The choice is annual — you can switch back every April.
The 30-second test
Add up your total old-regime deductions: 80C (up to ₹1.5 lakh) + 80D health insurance + HRA exempt portion + home loan interest (up to ₹2 lakh). If that total is greater than ₹3.5 lakh, the old regime almost certainly wins. If it's under ₹2 lakh, the new regime wins. In between, run a calculator.