Every salaried person in India has to choose between two tax regimes. The right choice depends on one thing: how much you can deduct.
The new regime
The new regime has lower slab rates and a standard deduction, but it allows very few other deductions. It works well if you do not invest much in tax-saving options.
The old regime
The old regime has higher slab rates, but you can claim deductions such as 80C, 80D, HRA and home loan interest. It can win if your total deductions are large.
How to decide
- Add up your yearly deductions (80C, health insurance, HRA, home loan interest).
- Enter your income and deductions in our Income Tax Calculator.
- Pick the regime with the lower tax.
Check the slabs on the official income tax website every year, because they can change.