Old vs New Tax Regime: The Break-Even Table for 10 Common Salary Cases (Copy & Decide Fast)

Choosing between the old and new tax regime confuses most salaried taxpayers because the decision depends on deductions, not just income. Many people blindly pick the new regime for lower rates or stick to the old regime out of habit — both approaches can cost thousands in extra tax.

This old vs new tax regime calculator guide gives a break-even framework with practical tables so you can decide in minutes. You’ll see when deductions make the old regime better, when the new regime wins, and how to calculate your own case quickly.

This guide is built for salaried individuals who want the lowest legal tax — not complicated planning.

Old vs New Tax Regime — What Actually Changes

The difference is simple:

Old tax regime

• Higher tax rates

• Allows deductions and exemptions

• Suitable for people with investments and expenses

New tax regime

• Lower tax rates

• Removes most deductions

• Simple structure with minimal documentation

Your decision depends on one question:

Do your deductions exceed the break-even level?

If yes → old regime
If no → new regime

Who Should Use This Break-Even Guide

Best suited for:

• Salaried employees

• People claiming HRA or home loan benefits

• Investors using 80C deductions

• Employees comparing regimes yearly

Not useful for:

• Individuals with fully fixed salary and no deductions

• People with only basic salary income

Common Deductions That Change the Decision

These deductions decide whether the old regime saves tax:

• Section 80C investments (PF, ELSS, insurance, PPF)

• HRA exemption

• Home loan interest

• Standard deduction

• NPS contribution

• Medical insurance deduction

Higher deductions → old regime advantage.

The 5-Minute Decision Formula

Use this simple method:

1. Calculate total income.

2. Add all deductions you can claim.

3. Compare with break-even deduction level.

4. Choose the regime with lower tax.

You don’t need complex software — just basic numbers.

Old vs New Tax Regime Break-Even Table

The table below shows approximate deduction levels where both regimes result in similar tax. If your deductions exceed the shown amount, the old regime usually wins.

Break-Even Deductions by Salary

How to use this table:

• If your deductions are higher → choose old regime.

• If lower → new regime likely better.

10 Common Salary Scenarios — What Works Better

Here are practical salary situations and the likely better option.

Case 1 — ₹7L Salary, No Investments

• Deductions minimal

• New regime wins

Case 2 — ₹7L Salary with PF + Insurance

• Deductions near ₹1.5L

• Old regime may win

Case 3 — ₹10L Salary, Paying Rent

• HRA + 80C deductions

• Old regime usually better

Case 4 — ₹10L Salary, No Rent or Investments

• Limited deductions

• New regime wins

Case 5 — ₹15L Salary with Home Loan

• Interest + principal deductions

• Old regime strongly beneficial

Case 6 — ₹15L Salary with No Deductions

• Clean income structure

• New regime wins

Case 7 — ₹20L Salary, High Investments

• ELSS + NPS + insurance

• Old regime wins

Case 8 — ₹20L Salary, Simple Salary Structure

• Few deductions

• New regime wins

Case 9 — ₹30L Salary with Rent + NPS

• Multiple deductions

• Old regime saves significant tax

Case 10 — ₹30L Salary, Fixed Pay

• No deductions

• New regime wins

The pattern is consistent: deductions decide everything.

Quick Comparison — Old vs New Regime

Hidden Factors Most People Ignore

Your decision should also consider:

• Future salary growth

• Planned investments

• Housing rent or loan plans

• Retirement contributions

• Employer salary structure

Choosing based only on current income can lead to wrong decisions.

Common Mistakes While Choosing Tax Regime

Avoid these costly errors:

• Choosing new regime just for lower rates

• Ignoring HRA exemption

• Not calculating total deductions

• Copying colleague’s decision

• Not reviewing decision yearly

• Forgetting NPS tax benefits

Your situation is unique — calculate individually.

Old vs New Regime Decision Checklist

Use this before finalizing your choice.

• Calculate total income

• Add all deductions

• Compare with break-even table

• Estimate tax under both regimes

• Choose lower tax option

• Review annually

This process takes less than 10 minutes.

Why Most Salaried Employees Still Choose the Wrong Regime

The main reason is convenience. The new regime looks simple, so people assume it is cheaper. But employees paying rent or investing regularly often save more under the old regime.

Tax decisions based on assumptions reduce take-home income.

Conclusion

The old vs new tax regime calculator approach is simple: compare your deductions with the break-even level. High deductions favor the old regime, while minimal deductions make the new regime better.

Instead of guessing or following trends, use a structured comparison every year. Tax planning is not about complexity — it is about choosing the option that lets you keep more of your income legally.

FAQs

Which tax regime is better for salaried employees?

It depends on deductions. Employees with significant deductions benefit from the old regime, while those with minimal deductions benefit from the new regime.

How much deduction makes the old regime better?

It varies by income, but typically ₹2–₹5 lakh in deductions makes the old regime advantageous for many salary levels.

Can I switch between tax regimes every year?

Salaried individuals can generally choose their regime each year while filing returns.

Does the new tax regime remove all deductions?

Most deductions are removed, though limited benefits like standard deduction may apply.

Should I calculate tax under both regimes?

Yes. Always compare both regimes before choosing to ensure the lowest tax liability.

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