What is Old vs New Tax Regime?
India has two parallel income tax structures: the old regime, with higher slab rates but access to deductions like 80C, HRA, and home loan interest; and the new regime (the default since FY 2023-24), with lower slab rates and a higher tax-free threshold but almost no deductions.
Salaried individuals with no business income can switch between the two regimes every financial year when filing their return. Those with business or professional income can switch back to the old regime only once in their lifetime after opting for the new one.
Broadly, taxpayers with large deductions (HRA + 80C + home loan interest) often do better under the old regime, while those with few deductions typically pay less under the new regime — but this varies by income level, so compare both directly rather than assuming.
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