💰 Tax Planning5 min read

New vs Old Tax Regime: A Simple Decision Framework

Forget the complex calculators. Here's a simple way to decide which regime works for you.

New vs Old Tax Regime: A Simple Decision Framework

Forget the complex calculators. Here's a simple way to decide.

The Simple Test

If your deductions (80C, 80D, HRA, home loan interest) exceed ₹3.75 lakhs → Old regime likely better

If deductions are less than ₹2.5 lakhs → New regime likely better

In between? Calculate both.

Common Scenarios

Salaried, no home loan, minimal investments: New regime usually wins.

Home loan + full 80C + health insurance: Old regime usually wins.

High salary (₹20L+), no home loan: New regime often wins due to lower rates.

Key Deductions to Consider

  • 80C: ₹1.5L (EPF, PPF, ELSS, etc.)
  • 80D: ₹25K-75K (health insurance)
  • HRA: Varies by rent and city
  • Home loan interest: Up to ₹2L

The best regime depends on YOUR specific situation. Don't just follow what others do.