Understanding the Slabs: Old vs New Tax Regime for FY 2026-27
The Finance Act has established the New Tax Regime as the default tax framework for individual taxpayers in India. While the new regime offers concessional tax rates and an enhanced standard deduction of ₹75,000 for salaried employees, taxpayers retain the freedom to opt for the Old Tax Regime each year if their aggregate deductions exceed their personalized breakeven threshold.
Side-by-Side Tax Slab Matrix (FY 2026-27 / AY 2027-28)
| Income Range | New Regime Rate (Default) | Old Regime Rate |
|---|---|---|
| Up to ₹2,50,000 | Nil | Nil |
| ₹2,50,001 – ₹3,00,000 | Nil | 5% |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% |
| ₹5,00,001 – ₹7,00,000 | 5% | 20% |
| ₹7,00,001 – ₹10,00,000 | 10% | 20% |
| ₹10,00,001 – ₹12,00,000 | 15% | 30% |
| ₹12,00,001 – ₹15,00,000 | 20% | 30% |
| Above ₹15,00,000 | 30% | 30% |
The Breakeven Math: When Does the Old Regime Win?
Because the New Tax Regime offers substantially wider slabs and lower rates, you only save tax in the Old Regime if your eligible exemptions exceed the regime difference breakeven threshold:
- Gross Salary ₹7.75 Lakhs or below: The New Regime is unconditionally superior. Tax is ₹0 thanks to Section 87A rebate and ₹75k standard deduction.
- Gross Salary ₹10 Lakhs: You need approximately ₹2.50 Lakhs in total deductions (e.g. 80C + 80D + HRA) before the Old Regime breaks even.
- Gross Salary ₹15 Lakhs: The breakeven threshold rises to approximately ₹3.75 Lakhs. If your combined HRA, 80C, 80D, and Home Loan interest exceed ₹3.75L, the Old Regime wins.
- Gross Salary ₹20 Lakhs+: You need roughly ₹4.25 Lakhs+ in deductions to beat the New Regime.
Looking for In-Depth Tax Strategies?
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