Short answer
For FY 2026-27 the new regime costs the same or less at every salary from ₹5 lakh to ₹50 lakh for someone who only claims ₹1.5 lakh under Section 123 (earlier 80C). The old regime wins only if your total deductions are large, for example about ₹7,08,400 at a ₹20 lakh salary, which usually needs HRA plus a home loan.
Tax at each salary, both regimes
| Salary | New regime | Old: ₹1.5L 80C | New regime saves | Deductions needed (besides ₹50,000 standard deduction) |
|---|---|---|---|---|
| ₹5 lakh | ₹0 | ₹0 | ₹0 | — |
| ₹7 lakh | ₹0 | ₹0 | ₹0 | ₹1,50,000 |
| ₹10 lakh | ₹0 | ₹75,400 | ₹75,400 | ₹4,50,000 |
| ₹12 lakh | ₹0 | ₹1,17,000 | ₹1,17,000 | ₹6,50,000 |
| ₹13 lakh | ₹26,000 | ₹1,48,200 | ₹1,22,200 | ₹6,87,500 |
| ₹15 lakh | ₹97,500 | ₹2,10,600 | ₹1,13,100 | ₹5,43,800 |
| ₹18 lakh | ₹1,50,800 | ₹3,04,200 | ₹1,53,400 | ₹6,41,700 |
| ₹20 lakh | ₹1,92,400 | ₹3,66,600 | ₹1,74,200 | ₹7,08,400 |
| ₹25 lakh | ₹3,19,800 | ₹5,22,600 | ₹2,02,800 | ₹8,00,000 |
| ₹30 lakh | ₹4,75,800 | ₹6,78,600 | ₹2,02,800 | ₹8,00,000 |
| ₹40 lakh | ₹7,87,800 | ₹9,90,600 | ₹2,02,800 | ₹8,00,000 |
| ₹50 lakh | ₹10,99,800 | ₹13,02,600 | ₹2,02,800 | ₹8,00,000 |
“Deductions needed” is the total of all old-regime deductions (Section 123, HRA, home-loan interest, health insurance, NPS and so on, besides the ₹50,000 standard deduction) at which the old regime costs the same as the new. Above that, the old regime is cheaper. A dash means both regimes already cost nothing.
With only ₹1.5 lakh of Section 123 deductions the old regime does not win at any of these salaries.
Why the new regime usually wins
- Zero tax up to ₹12.75 lakh. The ₹75,000 standard deduction and the Section 156 rebate mean no tax on salaries up to ₹12.75 lakh. The old regime's rebate stops at ₹5 lakh of taxable income.
- Wider, lower slabs. New-regime rates rise in ₹4 lakh steps from 5% to 30%, reaching 30% only above ₹24 lakh. The old regime hits 30% above ₹10 lakh of taxable income.
- Deductions have to be big. At ₹20 lakh the old regime needs about ₹7,08,400 of deductions to break even. ₹1.5 lakh of Section 123 plus ₹25,000 of health insurance is far short of that.
When the old regime can still win
The old regime makes sense when you combine several large deductions: a big-city HRA exemption, up to ₹2 lakh of interest on a self-occupied home loan, the full ₹1.5 lakh under Section 123, ₹50,000 extra in NPS under Section 124(3) and health insurance. Add them up and compare with the break-even figure for your salary.
You can choose your regime every year if you have only salary income. The fastest check is the old vs new regime calculator with your real deductions.
Sources
- Income Tax Dept: Section 202 (new regime rates)
- Income Tax Dept: Section 156 (rebate)
- Income Tax Dept: Section 123 (earlier 80C)
General information, not tax advice. Please consult a chartered accountant (CA) or tax professional before filing or making financial decisions.