Moment guide · FY 2026-27
I'm choosing between the old and new regime
Which regime saves me more tax this year?
₹75,000 is the new-regime standard deduction, while the section 87A rebate can make tax nil up to ₹12 lakh total income, with marginal relief just above. Compare the full return, not only salary: old-regime deductions may win where 80C, 24(b), 80D and HRA are substantial.
Your legitimate options
Every route the statute actually gives you — with its condition, cap and deadline.
| Route | Condition | Cap / deadline |
|---|---|---|
| New regime (default) | SD ₹75,000; rebate u/s 87A makes tax nil up to ₹12L total income, with marginal relief just above | Almost all Chapter VI-A deductions gone; 80CCD(2) employer NPS survives |
| Old regime | Wins when 80C + 24(b) + 80D + HRA stack is large; SD ₹50,000 | Salaried can re-choose yearly; business income locks the choice (one switch-back ever) |
The #1 trap
Employers default TDS to the new regime — missing the declaration window means a year of avoidable TDS even if old regime wins for you.
The decision path
Follow it top to bottom — the first condition that matches is your answer.
Worked example
Meera, product manager
Meera compares regimes on a simplified income base. Her gross salary is ₹12,75,000. Under the new regime, the ₹75,000 standard deduction produces total income of ₹12,00,000: ₹12,75,000 minus ₹75,000 = ₹12,00,000. Section 87A can make tax nil up to ₹12,00,000 total income, subject to the resident and ordinary-income conditions. On that simplified comparison, new-regime tax is ₹0 before any special-rate income like 111A STCG is added. The example does not assume that salary equals total income if she has other income. Meera then tests the old regime. Its standard deduction is ₹50,000, so the corresponding base is ₹12,25,000 before considering 80C, 24(b), 80D and HRA. Old-regime taxable income and tax payable then depend on how much of that ₹75,000 gap the deductions actually close. If Meera has enough eligible deductions, the old regime may win; if not, the new regime may remain lower. She also checks employer TDS: the employer defaults to the new regime, and missing the declaration window can change withholding even though the final return comparison remains available. She compares both outputs again after adding every eligible deduction and other income. The calculation is therefore not “₹12 lakh salary always means zero”; it is “₹12 lakh total income after the applicable deduction may qualify for the rebate.” Her provisional tax saving against any positive old-regime result would be that old-regime figure minus ₹0 — the regime calculator on this page pins it exactly.
Claims influencers make about this moment
- Partly true“You pay zero tax up to ₹12 lakh salary”
Questions people actually ask
Sections: 115BAC, 87A, 16(ia), 80C, 24(b) · Last verified 2026-08-09 · Reviewed by Harun Raaj & Associates, Chartered Accountants. Every figure cites the Income-tax Act, 1961 (with ITA 2025 mapping via our section index).