How the two regimes differ
The new regime has lower rates and a higher tax-free limit but allows almost no deductions. The old regime has higher rates but lets you subtract HRA, 80C, 80D, home loan interest and other items before tax is worked out. Which one costs less depends mostly on how much you can deduct.
A rough rule
If your salary is up to about ₹12.75 lakh, the new regime usually gives no tax at all because of the rebate and the standard deduction. Above that, the old regime tends to win only when your total deductions are large, often well above ₹3 to 4 lakh. The calculator works out both so you do not have to guess.
Things this does not cover
- Surcharge, so it stops at ₹50 lakh of taxable income.
- Income other than salary, such as rent, interest or capital gains.
- Employer NPS, which can be deducted in the new regime too.