New vs Old Tax Regime
Understanding how your choice of tax regime affects your estimated take-home
Why two regimes?
When calculating income tax in India, salaried employees generally have the option to choose between two different taxation structures: the New Tax Regime and the Old Tax Regime.
The calculator provides estimates for both so you can compare how the different rules might affect your final in-hand salary.
High-level differences
The two regimes use different tax slabs/rates and differ in which deductions and exemptions are available.
- Old Tax Regime: Allows you to claim a variety of specific deductions and exemptions. The final outcome can depend more heavily on utilizing these eligible deductions and exemptions represented by your specific inputs.
- New Tax Regime: Uses different income slabs and restricts many of the deductions available under the Old regime. It follows its applicable statutory structure rather than relying on detailed individual investment planning.
The lower-tax result depends on your individual inputs and the applicable rules. Neither regime is universally "better" for everyone.
What the calculator compares
When you use the Detailed Calculator, it can compare the estimated outcomes of both regimes using the inputs you provide. The comparison highlights differences in:
- Taxable income
- Estimated annual tax
- Estimated monthly and annual take-home salary
Important Old-Regime limitations
The Old Regime calculation is highly dependent on the deductions and exemptions represented by your inputs.
Note: The calculator models only the inputs and features it supports. It does not model every possible deduction, exemption, allowance, or personal tax circumstance available under the Income-tax Act.
Active Tax Year
Tax rules, slabs, and limits can change between tax years. The calculations and comparisons provided by Salary Reality India are currently based on the rules for:
FY 2026-27
Making your choice
While the calculator helps you compare estimated mathematical outcomes based on your inputs, it does not provide personalized recommendations. The final choice of which regime to opt for with your employer or when filing your return remains your responsibility.