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Last Updated: 5 July 2026
Salary Increased… But Why Didn't Your Savings?
Imagine this.
Your employer sends you an email:
"Which tax regime do you want to opt for this year — Old or New?"
Your colleague says:
"New regime is always better. Lower tax rates!"
Your random friend says:
"No way. Old regime saves more tax."
So… Who is actually right?
😏 Spoiler: Your CA is right. Don't take unsolicited advice from colleagues or friends who just heard something at a chai stall. Talk to a qualified CA who actually understands your numbers.
The answer depends entirely on your income, deductions, and financial situation.
There is no "one size fits all" answer. But by the end of this guide, you'll know exactly which regime is better for you.
Let's simplify it.
Quick Comparison: Old vs New Tax Regime
| Feature | Old Regime | New Regime |
|---|
| Lower Tax Rates | ❌ No | ✅ Yes |
| Section 80C (₹1.5L) | ✅ Yes | ❌ No |
| HRA Exemption | ✅ Yes | ❌ No |
| Standard Deduction | ✅ ₹50,000 | ✅ ₹75,000 |
| Home Loan Interest (24b) | ✅ Yes (₹2L) | ❌ No |
| Health Insurance (80D) | ✅ Yes | ❌ No |
| Education Loan (80E) | ✅ Yes | ❌ No |
| NPS (80CCD) | ✅ Yes | ✅ Only Employer Contribution (14% of Basic+DA) |
| Flexibility | High | Limited |
| Rebate (87A) | Up to ₹5L income | Up to ₹12L income |
What is the Old Tax Regime?
The Old Tax Regime is the traditional income tax system that existed before 2020.
Key Features:
- Higher tax rates compared to the new regime
- Allows almost all deductions and exemptions under the Income Tax Act
- You can claim 80C, 80D, HRA, home loan interest, 80E, LTA, and many more
- Best for people who have significant investments and expenses that qualify for deductions
Who should choose this?
- Salaried employees with HRA and home loans
- People with 80C investments (PPF, ELSS, LIC, FD, tuition fees)
- Those paying health insurance premiums (80D)
- Those with education loans (80E)
- Senior citizens with higher medical expenses
What is the New Tax Regime?
The New Tax Regime was introduced in Budget 2020 and made the default option from AY 2024-25.
Key Features:
- Lower tax rates across all income slabs
- Very few deductions allowed (mostly none)
- Simpler — no need to track investments and receipts
- Standard deduction of ₹75,000 is available
- Section 87A rebate up to ₹12 lakh income means zero tax for many
Who should choose this?
- People with minimal or no deductions to claim
- Young professionals starting their careers
- Those who don't invest in 80C or don't have home loans
- Anyone whose total income is below ₹12 lakh (zero tax!)
💡 Important Clarification: When we say "total income up to ₹12 lakh = zero tax," we mean net taxable income after the ₹75,000 standard deduction. This means if your gross salary is up to ₹12,75,000, you effectively pay ZERO tax under the New Regime. Many salaried professionals earning between ₹12L–₹12.75L mistakenly think they owe tax — they don't!
Tax Slab Comparison
✅ New Tax Regime Slabs (AY 2026-27 | FY 2025-26)
| Income Range | Tax Rate |
|---|
| Up to ₹4,00,000 | 0% |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Rebate u/s 87A: If your total income is up to ₹12 lakh — you pay ZERO tax. With the ₹75,000 standard deduction, this effectively means gross salary up to ₹12,75,000 = zero tax.
✅ Old Tax Regime Slabs (AY 2026-27 | FY 2025-26)
| Income Range | Tax Rate |
|---|
| Up to ₹2,50,000 | 0% |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Rebate u/s 87A: If your total income is up to ₹5 lakh — maximum rebate of ₹12,500.
Which Regime is Better? Real Examples
Deductions:
- 80C (PPF + ELSS): ₹1,50,000
- Standard Deduction: ₹50,000 (Old) | ₹75,000 (New)
- Total Deductions: ₹2,00,000 (Old) | ₹75,000 (New)
| Calculation | Old Regime | New Regime |
|---|
| Gross Income | ₹8,00,000 | ₹8,00,000 |
| Deductions | ₹2,00,000 | ₹75,000 |
| Taxable Income | ₹6,00,000 | ₹7,25,000 |
Old Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹2,50,000 | 0% | ₹0 |
| ₹2,50,001 to ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,001 to ₹6,00,000 | 20% | ₹20,000 |
| Tax Before Cess | ₹32,500 |
| + Cess (4%) | ₹1,300 |
| Total Tax | ₹33,800 |
New Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹4,00,000 | 0% | ₹0 |
| ₹4,00,001 to ₹7,25,000 | 5% | ₹16,250 |
| Tax Before Cess | ₹16,250 |
| Less: Rebate 87A (up to ₹12L) | ₹16,250 |
| Tax After Rebate | ₹0 |
| + Cess (4%) | ₹0 |
| Total Tax | ₹0 |
✅ Winner: New Regime (Saves ₹33,800 — ZERO tax due to rebate!)
✅ Spoiler: New Tax is always preferred if gross salary is till ₹12,75,000 (₹12L taxable income + ₹75K standard deduction) — ZERO tax due to rebate!
Case A: Moderate Deductions
Deductions:
- 80C (PPF + LIC + Tuition): ₹1,50,000
- 80D (Health Insurance): ₹25,000
- HRA Exemption: ₹1,20,000
- Home Loan Interest (24b): ₹1,50,000
- Standard Deduction: ₹50,000 (Old) | ₹75,000 (New)
- Total Deductions: ₹4,95,000 (Old) | ₹75,000 (New)
| Calculation | Old Regime | New Regime |
|---|
| Gross Income | ₹15,00,000 | ₹15,00,000 |
| Deductions | ₹4,95,000 | ₹75,000 |
| Taxable Income | ₹10,05,000 | ₹14,25,000 |
Old Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹2,50,000 | 0% | ₹0 |
| ₹2,50,001 to ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,001 to ₹10,00,000 | 20% | ₹1,00,000 |
| ₹10,00,001 to ₹10,05,000 | 30% | ₹1,500 |
| Tax Before Cess | ₹1,14,000 |
| + Cess (4%) | ₹4,560 |
| Total Tax | ₹1,18,560 |
New Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹4,00,000 | 0% | ₹0 |
| ₹4,00,001 to ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 to ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 to ₹14,25,000 | 15% | ₹33,750 |
| Tax Before Cess | ₹93,750 |
| + Cess (4%) | ₹3,750 |
| Total Tax | ₹97,500 |
✅ Winner: New Regime (Saves ₹21,060)
Case B: Maximum Deductions
Deductions:
- 80C: ₹1,50,000 (maximum)
- 80D: ₹50,000 (maximum — self + parents)
- HRA: ₹1,80,000 (higher exemption)
- Home Loan Interest (24b): ₹2,00,000 (maximum)
- Standard Deduction: ₹50,000 (Old) | ₹75,000 (New)
- Total Deductions: ₹6,30,000 (Old) | ₹75,000 (New)
| Calculation | Old Regime | New Regime |
|---|
| Gross Income | ₹15,00,000 | ₹15,00,000 |
| Deductions | ₹6,30,000 | ₹75,000 |
| Taxable Income | ₹8,70,000 | ₹14,25,000 |
Old Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹2,50,000 | 0% | ₹0 |
| ₹2,50,001 to ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,001 to ₹8,70,000 | 20% | ₹74,000 |
| Tax Before Cess | ₹86,500 |
| + Cess (4%) | ₹3,460 |
| Total Tax | ₹89,960 |
New Regime Tax Calculation: (Same as Case A)
| Slab | Rate | Tax |
|---|
| ₹0 to ₹4,00,000 | 0% | ₹0 |
| ₹4,00,001 to ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 to ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 to ₹14,25,000 | 15% | ₹33,750 |
| Tax Before Cess | ₹93,750 |
| + Cess (4%) | ₹3,750 |
| Total Tax | ₹97,500 |
✅ Winner: Old Regime (Saves ₹7,540)
Case A: Moderate Deductions
Deductions:
- 80C: ₹1,50,000
- 80D (Self + Parents): ₹50,000
- HRA: ₹1,50,000
- NPS (80CCD): ₹50,000
- Home Loan Interest: ₹2,00,000
- Standard Deduction: ₹50,000 (Old) | ₹75,000 (New)
- Total Deductions: ₹6,50,000 (Old) | ₹75,000 (New)
| Calculation | Old Regime | New Regime |
|---|
| Gross Income | ₹25,00,000 | ₹25,00,000 |
| Deductions | ₹6,50,000 | ₹75,000 |
| Taxable Income | ₹18,50,000 | ₹24,25,000 |
Old Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹2,50,000 | 0% | ₹0 |
| ₹2,50,001 to ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,001 to ₹10,00,000 | 20% | ₹1,00,000 |
| ₹10,00,001 to ₹18,50,000 | 30% | ₹2,55,000 |
| Tax Before Cess | ₹3,67,500 |
| + Cess (4%) | ₹14,700 |
| Total Tax | ₹3,82,200 |
New Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹4,00,000 | 0% | ₹0 |
| ₹4,00,001 to ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 to ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 to ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 to ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 to ₹24,00,000 | 25% | ₹1,00,000 |
| ₹24,00,001 to ₹24,25,000 | 30% | ₹7,500 |
| Tax Before Cess | ₹3,07,500 |
| + Cess (4%) | ₹12,300 |
| Total Tax | ₹3,19,800 |
✅ Winner: New Regime (Saves ₹62,400)
Case B: Maximum Deductions (Metro Professional — High HRA)
Deductions:
- 80C: ₹1,50,000 (maximum)
- 80D: ₹50,000 (self + parents)
- HRA: ₹4,00,000 (metro city — NCR/Delhi/Mumbai/Bangalore premium rent)
- NPS (80CCD): ₹50,000 (additional)
- Home Loan Interest (24b): ₹2,00,000 (maximum)
- Standard Deduction: ₹50,000 (Old) | ₹75,000 (New)
- Total Deductions: ₹9,00,000 (Old) | ₹75,000 (New)
| Calculation | Old Regime | New Regime |
|---|
| Gross Income | ₹25,00,000 | ₹25,00,000 |
| Deductions | ₹9,00,000 | ₹75,000 |
| Taxable Income | ₹16,00,000 | ₹24,25,000 |
Old Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹2,50,000 | 0% | ₹0 |
| ₹2,50,001 to ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,001 to ₹10,00,000 | 20% | ₹1,00,000 |
| ₹10,00,001 to ₹16,00,000 | 30% | ₹1,80,000 |
| Tax Before Cess | ₹2,92,500 |
| + Cess (4%) | ₹11,700 |
| Total Tax | ₹3,04,200 |
New Regime Tax Calculation: (Same as Case A)
| Slab | Rate | Tax |
|---|
| ₹0 to ₹4,00,000 | 0% | ₹0 |
| ₹4,00,001 to ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 to ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 to ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 to ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 to ₹24,00,000 | 25% | ₹1,00,000 |
| ₹24,00,001 to ₹24,25,000 | 30% | ₹7,500 |
| Tax Before Cess | ₹3,07,500 |
| + Cess (4%) | ₹12,300 |
| Total Tax | ₹3,19,800 |
✅ Winner: Old Regime (Saves ₹15,600)
Case A: Minimal Deductions
Deductions:
- 80C: ₹50,000 (only PF contribution)
- Standard Deduction: ₹50,000 (Old) | ₹75,000 (New)
- Total Deductions: ₹1,00,000 (Old) | ₹75,000 (New)
| Calculation | Old Regime | New Regime |
|---|
| Gross Income | ₹40,00,000 | ₹40,00,000 |
| Deductions | ₹1,00,000 | ₹75,000 |
| Taxable Income | ₹39,00,000 | ₹39,25,000 |
Old Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹2,50,000 | 0% | ₹0 |
| ₹2,50,001 to ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,001 to ₹10,00,000 | 20% | ₹1,00,000 |
| ₹10,00,001 to ₹39,00,000 | 30% | ₹8,70,000 |
| Tax Before Cess | ₹9,82,500 |
| + Cess (4%) | ₹39,300 |
| Total Tax | ₹10,21,800 |
New Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹4,00,000 | 0% | ₹0 |
| ₹4,00,001 to ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 to ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 to ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 to ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 to ₹24,00,000 | 25% | ₹1,00,000 |
| ₹24,00,001 to ₹39,25,000 | 30% | ₹4,57,500 |
| Tax Before Cess | ₹7,57,500 |
| + Cess (4%) | ₹30,300 |
| Total Tax | ₹7,87,800 |
✅ Winner: New Regime (Saves ₹2,34,000)
Case B: Maximum Deductions (Senior Executive — All Benefits)
Deductions:
- 80C: ₹1,50,000 (maximum)
- 80D: ₹75,000 (₹25,000 self + ₹50,000 senior citizen parents)
- HRA: ₹6,00,000 (metro city — premium rent in NCR/Delhi/Mumbai)
- Home Loan Interest (24b): ₹2,00,000 (maximum)
- 80E (Education Loan Interest): ₹2,00,000
- Standard Deduction: ₹50,000 (Old) | ₹75,000 (New)
- Total Deductions: ₹12,75,000 (Old) | ₹75,000 (New)
| Calculation | Old Regime | New Regime |
|---|
| Gross Income | ₹40,00,000 | ₹40,00,000 |
| Deductions | ₹12,75,000 | ₹75,000 |
| Taxable Income | ₹27,25,000 | ₹39,25,000 |
Old Regime Tax Calculation:
| Slab | Rate | Tax |
|---|
| ₹0 to ₹2,50,000 | 0% | ₹0 |
| ₹2,50,001 to ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,001 to ₹10,00,000 | 20% | ₹1,00,000 |
| ₹10,00,001 to ₹27,25,000 | 30% | ₹5,17,500 |
| Tax Before Cess | ₹6,30,000 |
| + Cess (4%) | ₹25,200 |
| Total Tax | ₹6,55,200 |
New Regime Tax Calculation: (Same as Case A)
| Slab | Rate | Tax |
|---|
| ₹0 to ₹4,00,000 | 0% | ₹0 |
| ₹4,00,001 to ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 to ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 to ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 to ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 to ₹24,00,000 | 25% | ₹1,00,000 |
| ₹24,00,001 to ₹39,25,000 | 30% | ₹4,57,500 |
| Tax Before Cess | ₹7,57,500 |
| + Cess (4%) | ₹30,300 |
| Total Tax | ₹7,87,800 |
✅ Winner: Old Regime (Saves ₹1,32,600)
Master Comparison Table
| Scenario | Old Regime Tax | New Regime Tax | Winner | Savings |
|---|
| ₹8L — Young Professional | ₹33,800 | ₹0 | New | ₹33,800 |
| ₹15L — Moderate Deductions | ₹1,18,560 | ₹97,500 | New | ₹21,060 |
| ₹15L — Maximum Deductions | ₹89,960 | ₹97,500 | Old | ₹7,540 |
| ₹25L — Moderate Deductions | ₹3,82,200 | ₹3,19,800 | New | ₹62,400 |
| ₹25L — Maximum Deductions (Metro) | ₹3,04,200 | ₹3,19,800 | Old | ₹15,600 |
| ₹40L — Minimal Deductions | ₹10,21,800 | ₹7,87,800 | New | ₹2,34,000 |
| ₹40L — Maximum Deductions | ₹6,55,200 | ₹7,87,800 | Old | ₹1,32,600 |
Quick Decision Rule
| Your Situation | Recommended Regime |
|---|
| Gross Salary below ₹12.75 lakh | New Regime (zero tax after ₹75K standard deduction) |
| No home loan, no HRA, minimal 80C | New Regime |
| Total deductions > ₹6 lakh | Calculate Both — Old may win |
| Home loan + HRA + 80C + 80D + 80E | Calculate Both — depends on amounts |
| Income above ₹20 lakh, minimal deductions | New Regime |
| Metro professional with ₹4L+ HRA + home loan | Old Regime likely better |
| Business income (ITR-3/4) | Calculate both — choose once |
Major Differences Explained
🏠 HRA (House Rent Allowance)
| Old Regime | New Regime |
|---|
| ✅ Exempt under Section 10(13A) | ❌ Not available |
If you pay rent and receive HRA from your employer, the old regime can save significant tax. Metro city professionals with high rents benefit most.
💰 Section 80C
| Old Regime | New Regime |
|---|
| ✅ Up to ₹1,50,000 (PPF, ELSS, LIC, FD, Tuition, etc.) | ❌ Not available |
If you regularly invest in PPF, ELSS, or pay LIC premiums, old regime is better.
🏥 Section 80D (Health Insurance)
| Old Regime | New Regime |
|---|
| ✅ Up to ₹25,000 (self) + ₹50,000 (parents) | ❌ Not available |
🏡 Home Loan Interest (Section 24b)
| Old Regime | New Regime |
|---|
| ✅ Up to ₹2,00,000 for self-occupied property | ❌ Not available |
If you have a home loan, this deduction alone can make the old regime better.
📚 Education Loan (Section 80E)
| Old Regime | New Regime |
|---|
| ✅ Interest paid on education loan (no upper limit) | ❌ Not available |
If you're repaying an education loan, the entire interest amount is deductible in the old regime.
📈 NPS (National Pension System)
| Old Regime | New Regime |
|---|
| ✅ 80CCD(1B): Extra ₹50,000 | ❌ Employee contribution not allowed |
| ✅ 80CCD(2): Employer contribution up to 10% of Basic+DA | ✅ Employer contribution up to 14% of Basic+DA (raised from 10%) |
💡 Update: For private sector employees, the employer NPS contribution limit under Section 80CCD(2) in the New Regime has been raised from 10% to 14% of Basic Salary + DA, matching government employees. This is a significant benefit in the new regime.
👨👩👧 Family Pension (Section 57(iia))
| Old Regime | New Regime |
|---|
| ✅ Up to ₹15,000 | ✅ Up to ₹25,000 (increased from ₹15,000) |
In the Old Regime, family pension deduction is limited to ₹15,000. In the New Regime, it was increased to ₹25,000 — one of the few deductions that actually got better in the new regime.
Salaried Employees: Do You Need to Inform Your Employer?
Yes. You must inform your employer about your chosen regime so they can deduct the correct TDS.
But remember: This is only for TDS purposes. Your final choice is made when you file your ITR. If your employer deducted TDS under the wrong regime, you can claim a refund or pay the difference when filing.
What is Form 10-IEA?
Form 10-IEA is a declaration filed by taxpayers with business or professional income who want to opt for the old tax regime.
Who Needs to File?
| Filer | Need Form 10-IEA? |
|---|
| Salaried (ITR-1/2) | ❌ No — just select in ITR |
| Business/Professional (ITR-3/4/5) | ✅ Yes |
When to File?
Before the due date of filing ITR under Section 139(1) — typically July 31 of the assessment year.
Can Business Owners Switch Every Year?
No. Unlike salaried employees, business owners have restrictions:
- Once you opt out of the new regime (file Form 10-IEA), you have only one chance to switch back
- Once you switch back to the new regime, you cannot return to the old regime
- Choose carefully — this decision has long-term implications
Common Mistakes to Avoid
| Mistake | Why It Hurts |
|---|
| Choosing without calculating | You might pay thousands extra in tax |
| Forgetting to inform employer | Wrong TDS deduction, refund delays |
| Assuming old regime is always better | New regime often wins with updated slabs |
| Ignoring rebate u/s 87A | Gross salary up to ₹12.75L = zero tax in new regime |
| Missing the ITR deadline | You lose the option to choose |
| Business owners filing Form 10-IEA by mistake | Cannot be reversed for that year |
🤖 Still Confused? Let Our AI Help You
Don't guess. Don't rely on generic advice. Upload your Form 16, Salary Details, and Investment Proofs. Our AI Tax Assistant will compare both regimes with your actual numbers, show exactly how much tax you'll pay under each, and recommend the best option for you.
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Frequently Asked Questions
Q. Can I switch between Old and New Tax Regime every year?
For Salaried Employees: Yes. You can choose a different regime every year when filing your ITR.
For Business Owners: No. Once you opt out of the new regime, you can switch back only once. After that, you're locked into the new regime permanently.
Q. Can I claim HRA in the New Tax Regime?
No. HRA exemption under Section 10(13A) is only available in the Old Tax Regime.
Q. Is standard deduction available in the New Tax Regime?
Yes. From AY 2024-25, standard deduction of ₹75,000 is available in the new regime (₹50,000 in the old regime).
Q. Can I claim 80C deductions in the New Tax Regime?
No. Most Chapter VI-A deductions including 80C are not allowed in the new regime. Only 80CCD(2) (employer's NPS contribution), 80CCH (Agniveer Corpus), 80JJAA, and Section 57(iia) (family pension) are permitted.
Q. Can I claim home loan interest in the New Tax Regime?
No. Interest on borrowed capital for self-occupied property (Section 24b) up to ₹2 lakh is not allowed in the new regime.
Q. What happens if I don't choose any regime?
If you don't make a choice, the New Tax Regime applies by default (from AY 2024-25 onwards).
Q. I filed Form 10-IEA by mistake. Can I change?
No. Once filed, Form 10-IEA cannot be withdrawn for that assessment year. You must file under the old regime and switch back only from the next year.
Q. Which regime is better for senior citizens?
In the old regime, senior citizens (60-80 years) get higher basic exemption (₹3 lakh) and super seniors (80+ years) get ₹5 lakh.
In the new regime, everyone gets zero tax up to ₹12 lakh taxable income (₹12.75 lakh gross salary) due to the enhanced rebate. For many seniors, the new regime is simpler and equally beneficial.
Q. Can I claim NPS deduction in the New Tax Regime?
Only employer's contribution under Section 80CCD(2) is allowed — up to 14% of Basic Salary + DA for private sector employees (raised from 10%). Your own contribution under 80CCD(1B) (additional ₹50,000) is not allowed in the new regime.
Q. What is the maximum gross salary for zero tax in the New Regime?
Thanks to the ₹75,000 standard deduction, a person with a gross salary up to ₹12,75,000 will have a net taxable income of ₹12,00,000 — which qualifies for full rebate under Section 87A. Zero tax!
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Written by InstantTaxFile CA Team
Expert Chartered Accountants with 10+ years of experience in Indian taxation. We combine professional expertise with AI-powered tools.