A practical framework for deciding between the two regimes for FY 2026-27.

By Kanoons Editorial Team · 6 min read · Last verified 2026-07-26

The new regime (now the default) offers lower slab rates and a ₹75,000 standard deduction plus a rebate under section 157 that makes income up to ₹12 lakh effectively tax-free, but it removes most exemptions and deductions like 80C, HRA and home loan interest.

The old regime keeps those deductions but at higher slab rates. As a rule of thumb, the old regime tends to win only when a taxpayer has a large home loan, maximises 80C investments, and claims substantial HRA. Run both scenarios through the Income Tax calculator before deciding.