The default changed — and that matters
The new regime is now the default for every taxpayer who doesn't actively choose otherwise. It comes with revised slab rates and a rebate that keeps income up to ₹12 lakh effectively tax-free in FY 2025-26 — but it asks you to give up most deductions.
The old regime keeps the familiar deduction toolkit: Section 80C investments, HRA, home-loan interest and the rest, at the older slab rates.
The rule of thumb
If your income is straightforward — salary, some interest, little else — the new regime usually wins, and the rebate makes it a runaway for incomes under the rebate ceiling.
The old regime only fights back when your deductions are heavy: a large home-loan interest bill, full 80C usage, HRA in a metro, or family health premiums under Section 80D. The more of those you stack, the more the old regime claws back.
Don't guess — compute
The honest answer is that no rule of thumb survives contact with a real salary structure. Business owners and freelancers have it harder still, because business income interacts with presumptive taxation and advance-tax planning in ways the regimes treat differently.
Before you file, get both computations done side by side — it takes a professional minutes and can change the answer entirely. Our income tax service does exactly this as standard: regime comparison, filing, and a planning note for the year ahead. Talk to us before the deadline crowd does.
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Book a free 20-minute consultation — we'll map out the exact next step for your business.