Old vs New Tax Regime: How to Choose

Every year, individual taxpayers have to decide which regime gives them lower tax. There is no single answer, as it depends on your income and deductions.

The basic difference

• New regime: lower slab rates, but most deductions and exemptions are not available
• Old regime: higher slab rates, but you can claim deductions such as 80C, 80D, HRA and home loan interest

When the old regime may help

If you have a good amount of eligible deductions, such as EPF/PPF, life and health insurance, home loan interest and HRA, the old regime can sometimes work out cheaper.

When the new regime may help

If you have few deductions, the lower rates and simpler filing of the new regime are often better.

Switching between regimes

Salaried taxpayers can usually choose each year. People with business income face restrictions on switching back, so decide carefully.

Compare, don’t guess

Use our income tax calculator to compare both regimes with your numbers, or ask us to check before you file.

This article is general information, not professional advice. Rules and limits change, so please confirm the current position or contact us.