Old vs new regime — which one pays less (Section 202 vs the old slabs)

The new regime in short (default)

• Wider, lower slabs and a ₹75,000 standard deduction (Section 19).
• A full rebate so tax is nil up to ₹12 lakh of income (Section 156, old 87A) — ₹12.75 lakh for the salaried after standard deduction.
• But you lose HRA, LTA, 80C, 80D, home-loan interest on a self-occupied house, and your own NPS.
• What survives: standard deduction, employer NPS & perquisites, a few duty allowances, retirement exemptions.

The old regime in short

Higher slabs, but you can stack HRA, 80C (₹1.5L), 80D, home-loan interest (₹2L), 80CCD(1B) and dozens more. Rebate makes tax nil up to ₹5 lakh only.

The break-even rule of thumb

• Claim few deductions (renting isn't a factor, no big 80C/home loan) → the new regime almost always wins.
• Claim large deductions — HRA + ₹1.5L 80C + ₹2L home-loan interest + 80D — → the old regime can still beat it, often once total deductions cross roughly ₹4–5 lakh.

How to choose

It's a yearly choice for the salaried (business income has a one-time restriction on switching back). Compute both every year. Worked example: ₹15 lakh salary, ₹6 lakh of genuine deductions → old regime wins; the same salary with ₹1 lakh of deductions → new regime wins comfortably.

Who it helps

Every individual taxpayer — the single biggest yearly decision, made before you file.