Choosing between the old and new tax regime has become one of the most important financial decisions for Indian salary earners. The government continues to push the new regime, but many people still prefer the old one because of deductions.
This guide helps you compare both regimes clearly so you can choose the one that saves more tax in 2026.
What Is the New Tax Regime in 2026
The new regime offers lower tax rates but removes most exemptions.
Key points:
• Lower slab rates
• No major deductions like 80C, 80D or HRA
• Simplified structure
• Ideal for people who do not invest much in tax saving plans
What Is the Old Tax Regime
The old regime offers higher tax rates but gives many deductions and exemptions.
Key points:
• Higher slab rates
• Full access to deductions like 80C, 80D, HRA, LTA and home loan interest
• Good for salaried people who invest regularly
Tax Slab Comparison for 2026
New Regime (2026)
• 0 to 3 lakh: 0 percent
• 3 to 7 lakh: 5 percent
• 7 to 10 lakh: 10 percent
• 10 to 12 lakh: 15 percent
• 12 to 15 lakh: 20 percent
• Above 15 lakh: 30 percent
Old Regime (2026)
• Similar previous slabs
• Higher tax rates
• But deductions bring taxable income much lower
Which Regime Saves More Tax in 2026
Choose New Regime if:
• You invest less than 1 lakh a year
• You live in non metro without HRA benefits
• You prefer simple tax filing
Choose Old Regime if:
• You use 80C fully (1.5 lakh)
• You pay home loan interest
• You get HRA
• You buy health insurance under 80D
Simple Example
If your salary is 10 lakh yearly:
• No deductions: New regime saves more
• Full deductions: Old regime saves more
This is why your choice depends on your actual investments and benefits.
Conclusion
Both tax regimes will continue to exist in 2026. There is no single right choice for everyone.
If you use multiple deductions, the old regime is better.
If you prefer simplicity and do not claim deductions, the new regime usually wins.
Evaluate your salary, investments and lifestyle to choose the best regime for 2026.
