Indian Income Tax Calculator — Old vs New Regime FY 2024-25
Choosing between the Old Tax Regime and the New Tax Regime is the most consequential annual decision for most salaried Indians. The new regime offers lower slab rates but eliminates most deductions; the old regime preserves 80C, HRA, and medical deductions in exchange for higher headline rates. Use this calculator to compare your exact tax liability under both regimes and pick the one that keeps more money in your pocket.
New Regime FY2024-25 slabs: 0% up to ₹3L, 5% on ₹3-7L, 10% on ₹7-10L, 15% on ₹10-12L, 20% on ₹12-15L, 30% above ₹15L. Rebate u/s 87A: zero tax if net taxable income ≤ ₹7L.
Old Regime vs New Regime — Which is Better and When
The new regime is simpler — fewer decisions, no investment proofs to gather, and lower marginal rates for most income levels. But it removes the deductions that high-savers rely on. As a rule of thumb: if your total deductions under the old regime exceed ₹3.75 lakh (₹1.5L under 80C + ₹50K NPS under 80CCD(1B) + ₹25K 80D + ₹50K standard deduction + other deductions), stick with the old regime. If you do not actively invest in tax-saving instruments, the new regime's lower rates almost always win. The new regime is now the default — you must explicitly opt for the old regime when filing.
Key Deductions in the Old Regime
Section 80C (up to ₹1.5 lakh): EPF, PPF, ELSS, NSC, 5-year FD, life insurance premiums, home loan principal, tuition fees. Section 80CCD(1B) (up to ₹50,000 additional): NPS contributions. Section 80D: ₹25,000 for self/family health insurance, ₹25,000 more for parents (₹50,000 if parents are senior citizens). HRA (House Rent Allowance): exempt up to the least of actual HRA received, 50% of basic (metro) or 40% (non-metro), or rent paid minus 10% of basic. Standard deduction: flat ₹50,000 for all salaried employees.
What the New Regime Changes — Standard Deduction Increase
Budget 2024 made the new regime more competitive by raising the standard deduction from ₹50,000 to ₹75,000 for salaried employees and pensioners. The employer's NPS contribution deduction (Section 80CCD(2)) is also available in the new regime — up to 10% of salary (14% for central government employees). These are the primary deductions that remain in the new regime; most others, including 80C, HRA, and 80D, are not available.
Surcharge and Cess — The Tax on Your Tax
After computing your basic income tax, two additional charges apply. Health and Education Cess: 4% on (tax + surcharge), payable by all taxpayers. Surcharge: an additional percentage of tax for high incomes — 10% for income ₹50L–₹1Cr, 15% for ₹1Cr–₹2Cr. For income above ₹5Cr, the new regime caps surcharge at 25% (down from 37% in the old regime), making the new regime significantly better for very high earners.
Quick Reference
- PPF (Public Provident Fund) — tax-free interest, EEE status
- ELSS mutual funds — 3-year lock-in, market-linked returns
- EPF — employer + employee contributions, tax-free on retirement
- NSC (National Savings Certificate) — guaranteed 7.7% (current)
- 5-year tax-saver FD — fixed return, counts under 80C
- Life insurance premium — term and endowment policies
Frequently Asked Questions
What is the difference between old and new tax regime?
The Old Regime has higher tax rates but allows you to claim deductions like 80C (up to ₹1.5L), 80D (medical insurance), HRA, LTA, and standard deduction of ₹50,000 — which reduce your taxable income. The New Regime (introduced in Budget 2020, revised in 2023) has lower slab rates and a higher standard deduction of ₹75,000 from FY2024-25, but most deductions are not available. The new regime is now the default for salaried employees.
Which regime is better for me?
Generally: if your total deductions under the old regime exceed approximately ₹3.75 lakh (including standard deduction of ₹50,000), the old regime saves more tax. If your deductions are lower — or if you do not invest in 80C instruments — the new regime usually results in lower tax. The break-even point varies by income level. Use this calculator to compare both side by side for your specific situation.
What is Section 80C?
Section 80C allows deductions up to ₹1.5 lakh per year in the Old Regime for investments in: EPF (employee provident fund), PPF (public provident fund), ELSS mutual funds, NSC (National Savings Certificate), 5-year bank FDs, life insurance premiums, home loan principal repayment, tuition fees for children, and NPS contributions (with an additional ₹50,000 under 80CCD(1B)).
What is the Section 87A rebate?
Section 87A provides a full tax rebate — meaning zero income tax payable — for individuals whose total taxable income does not exceed ₹7 lakh under the New Regime (as of FY2024-25). Under the Old Regime, the rebate applies to incomes up to ₹5 lakh. The rebate equals the actual tax liability, so any income at or below these thresholds results in ₹0 tax before cess.
What is the standard deduction for salaried employees?
The standard deduction is a flat deduction available without requiring any investment proof or bills. In the Old Regime: ₹50,000 standard deduction for salaried employees. In the New Regime (FY2024-25 onwards): increased to ₹75,000. This was enhanced in Budget 2024 to make the new regime more attractive for salaried taxpayers.
What is surcharge in income tax?
Surcharge is an additional levy on income tax for high-income earners. It is charged as a percentage of the basic income tax — not on income directly. Rates: 10% surcharge for income between ₹50L–₹1Cr, 15% for ₹1Cr–₹2Cr, 25% for ₹2Cr–₹5Cr (15% under new regime), and 37% for income above ₹5Cr (25% under new regime from FY2023-24). Additionally, 4% Health and Education Cess applies to all taxpayers on (tax + surcharge).
Can I switch between old and new regime every year?
It depends on your income type. Salaried employees and pensioners with no business income can switch between regimes every financial year — they choose when filing their ITR. Individuals with business or professional income can switch only once after opting out of the new regime; after that they are locked into the old regime and cannot switch back.