Old Tax Regime vs New Tax Regime Under IT Act 2025: The Complete Comparison for Tax Year 2026-27
Quick Summary Box
| Parameter | Old Tax Regime | New Tax Regime (Section 202) |
|---|---|---|
| Default regime | No — must opt in | Yes — default from Tax Year 2026-27 |
| Basic exemption limit | ₹2.5 lakh (general) / ₹3 lakh (senior) | ₹4 lakh (all individuals) |
| Rebate u/s 87A equivalent | Up to ₹5 lakh total income | Up to ₹12 lakh total income |
| Standard deduction | ₹75,000 (salary) | ₹75,000 (salary) |
| 80C deduction (Section 123) | ✅ Available (₹1.5 lakh) | ❌ Not available |
| 80D deduction (Section 124) | ✅ Available | ❌ Not available |
| HRA exemption | ✅ Available | ❌ Not available |
| LTA exemption | ✅ Available | ❌ Not available |
| Home loan interest (Section 22(b)) | ✅ Available (₹2 lakh) | ❌ Not available |
| Switching frequency | Once per year (before filing ITR) | Default; can switch to old once per year |
Old Tax Regime vs New Tax Regime Under IT Act 2025 — Complete Comparison for Tax Year 2026-27: Tax Slabs, Deductions, Who Benefits, and How to Decide
One of the most frequently asked questions by every salaried employee, business owner, and tax professional in India as we enter Tax Year 2026-27 is this: which tax regime should I choose — old or new?
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