Old vs new regime — who should still choose old?
The old regime only wins above a certain level of deductions. See that line for every salary, and the profiles that cross it.
The choice comes down to one number: how much you can deduct in the old regime. The new regime has lower rates and a bigger standard deduction. The old regime has higher rates but lets you subtract 80C, 80D, HRA, home-loan interest and more. If your deductions cross a certain line, old wins. If not, new wins.
Here’s that line for different salaries:
Reading the chart
- At ₹10 lakh you’d need about ₹4.5 lakh of deductions. That’s hard, since the new regime’s tax at that level is already zero.
- At ₹12 lakh the new regime charges no tax at all, so the old regime needs about ₹6.5 lakh of deductions just to tie. The line peaks at about ₹7.2 lakh at a ₹12.75 lakh salary, the most the new regime leaves tax-free, then drops to about ₹6.9 lakh at ₹13 lakh.
- At ₹15 lakh the line is about ₹5.4 lakh.
- At ₹20 lakh it’s about ₹7.1 lakh.
- Above about ₹24 lakh it settles at roughly ₹8 lakh. Both regimes then tax your top rupees at 30%, so the gap between them stops growing.
What a ₹6–8 lakh deduction looks like
80C alone (₹1.5 lakh) never gets you there. People who cross the line usually stack several of these:
| Deduction | Typical maximum |
|---|---|
| 80C: EPF, PPF, ELSS, life insurance, tuition | ₹1,50,000 |
| 80D: health insurance (self + senior parents) | ₹75,000 |
| NPS (80CCD 1B) | ₹50,000 |
| Home-loan interest (self-occupied) | ₹2,00,000 |
| HRA exemption | Often ₹2–5 lakh in big cities |
So the old regime suits someone like this: renting in a big city with a large HRA component, and paying a home loan on another property, plus maxing out 80C and health cover. That person exists, but they’re a minority.
Switching
- Salaried people can switch every year when filing their return. Tell your employer your choice at the start of the year so TDS is right; if you don’t, the new regime is assumed.
- People with business or professional income can move back from new to old only once in a lifetime.
The bottom line
Run your real deductions through the regime calculator. If you’re not clearly above the line, the new regime is simpler, needs no investment proofs, and leaves your money free to invest wherever you like.