New vs Old Tax Regime FY 2026-27: How Much Deduction You Need at ₹8L to ₹30L Salary

For FY 2026-27 the slabs are unchanged from last year, and the new regime is still the default. The question is not which regime is "better" in general but how big your deductions are against a break-even that rises with income. Below: the slabs, the exact deduction you need at each salary, and which profiles still come out ahead on the old regime.

The Slabs Side by Side (FY 2026-27)

Two rebates matter more than the slabs. Under the new regime, the Section 87A rebate (up to ₹60,000) makes taxable income up to ₹12 lakh tax-free, which for a salaried person means gross pay up to ₹12.75 lakh after the ₹75,000 standard deduction. Just above ₹12 lakh, marginal relief caps the tax at the income above ₹12 lakh. Under the old regime the rebate is only ₹12,500, for taxable income up to ₹5 lakh, and the standard deduction is ₹50,000. Special-rate income such as capital gains does not get the rebate.

How Much Do You Need in Deductions for the Old Regime to Win?

The tax difference between the regimes is large at every salary, so the old regime needs a big deduction stack to catch up. The table shows the deductions (beyond the standard deduction) at which both regimes cost the same tax. Above that figure the old regime wins; below it the new regime does. Where the new regime already charges ₹0 (salaries up to ₹12.75 lakh), the old regime can at best tie.

Which Deductions Count Toward That Break-Even?

Only the old regime allows these. Add up what you actually claim, not what you could.

• Section 80C: up to ₹1.5 lakh (EPF, PPF, ELSS, life insurance premium, home loan principal)
• Section 80D: ₹25,000 for self and family, ₹50,000 if senior citizens, with separate limits for parents — see the Section 80D guide
• Home loan interest on a self-occupied house, Section 24(b): up to ₹2 lakh — see home loan tax benefits under both regimes
• NPS, Section 80CCD(1B): an extra ₹50,000
• HRA exemption: the lowest of actual HRA, rent paid minus 10% of salary, and 50% of salary in metros or 40% elsewhere — see the HRA guide
• Employer NPS contribution under Section 80CCD(2) is allowed in both regimes, so it does not shift the comparison

A common stack — ₹1.5 lakh in 80C, ₹25,000 in 80D, ₹50,000 in NPS and ₹2 lakh of home loan interest — adds up to ₹4.25 lakh. That is enough to bring old-regime tax down to zero for salaries up to about ₹9.75 lakh, but the new regime is already free there, so it only ties. At ₹15 lakh you need ₹5.44 lakh and at ₹20 lakh ₹7.09 lakh, so you need HRA or large home loan interest on top.

Worked Example: ₹20 Lakh Salary With Every Deduction Claimed

Take a metro employee earning ₹20 lakh who claims HRA of ₹1.5 lakh, 80C of ₹1.5 lakh, 80D of ₹25,000, NPS of ₹50,000 and home loan interest of ₹2 lakh, a total of ₹5.75 lakh. Under the old regime the taxable income is ₹20,00,000 − ₹50,000 − ₹5,75,000 = ₹13,75,000 and the tax with cess is ₹2,34,000. Under the new regime the taxable income is ₹19,25,000 and the tax with cess is ₹1,92,400. Even with every deduction in play, the new regime saves ₹41,600. The old regime would need ₹7.09 lakh of deductions to match it.

Decision Map by Profile

• Salaried, gross up to ₹12.75 lakh: new regime, with zero tax. The old regime cannot compete.
• Salaried, ₹15–25 lakh, no HRA and no home loan: new regime. Your deductions will not reach ₹5–8 lakh.
• Salaried, ₹15–25 lakh, high rent plus a home loan plus maximum 80C/80D/NPS: run the numbers; this is the only group where the old regime can win. The salaried break-even guide walks through a ₹15 lakh case.
• Business or professional income: the choice is largely one-way. If you opt out of the new regime you can return to it only once, and the old regime needs Form 10-IEA — see Form 10-IEA.
• Senior citizens: higher basic exemption in the old regime and different deductions — see old vs new for senior citizens.