Lesson 1 of 3 · 7 min
Two rulebooks, one choice
The new regime is the default: lower rates, almost no deductions. The old regime holds on to the deductions and charges more inside every slab.
For tax year 2026-27 (older forms may still say AY 2027-28), every salaried taxpayer is placed in the new regime by default and can opt for the old one instead.
The new regime has gentler slabs and a bigger rebate but strips away almost every deduction. The old regime taxes harder — 30% starts at ₹10 lakh instead of ₹24 lakh — and in exchange lets you subtract rent, savings and cover from your taxable income first.
| Feature | New regime (default) | Old regime (opt-in) |
|---|---|---|
| Standard deduction on salary | ₹75,000 | ₹50,000 |
| Tax is nil up to (taxable income) | ₹12,00,000, via the section 87A (now section 156) rebate | ₹5,00,000 |
| 30% rate starts at | ₹24,00,000 | ₹10,00,000 |
| 80C, 80D, HRA, home-loan interest | Not available | Available |
| Employer NPS, section 80CCD(2) (now section 124) | Up to 14% of salary | Up to 10% of salary |
Sort it
1 / 7
Does this deduction survive in the new regime?
₹1.5 lakh under section 80C (now section 123) — PPF, EPF, ELSS, life insurance, tuition fees
Quick check
You pay rent, invest in PPF, and your employer puts money into NPS. Under the new regime, which of these still reduces your taxable income?
Check yourself
1 / 3
Kabir asks
You tell payroll nothing and file nothing special. Which regime applies to you?
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