Add up these four:
- 80C (PPF + ELSS + EPF + home loan principal — combined cap)
- HRA exemption
- Section 24(b) home loan interest, self-occupied
- 80D health insurance
If the total clears ₹3.75 Lakh, Old saves you more. Below it, New wins — because of the ₹75,000 standard deduction you get automatically and the 87A rebate that wipes tax up to ₹7 Lakh taxable.
That's the whole call. The rest of this post is just showing the working.
Where ₹3.75L comes from
New gives you ₹75K standard deduction without lifting a finger. Old gives ₹50K. So Old starts ₹25K behind on the deduction line. To overtake, your Old-regime deductions need to make up that ₹25K *and* beat the slab differences.
Run the FY 2025-26 slabs against typical salary bands and the breakeven lands around ₹3.75L of stackable deductions. It shifts ₹10–20K either way depending on your slab and city — but ₹3.75L is the right number to anchor on.
The four numbers worth knowing
| Bucket | Cap | Reality check |
|---|---|---|
| 80C | ₹1.5L | Combined cap. If your EPF alone is ₹1L, you have ₹50K left for PPF/ELSS. |
| HRA | varies | Mumbai renter at ₹40K/month easily clears ₹2L exemption. Bangalore at ₹25K → ~₹1.2L. |
| 24(b) | ₹2L | Self-occupied. Let-out has no cap. Joint loan with spouse? Each can claim ₹2L. |
| 80D | ₹25K – ₹75K | Self + family. Add parents (60+) → up to ₹50K more. |
A salaried Mumbai renter with a home loan crosses ₹4–5L of deductions without trying hard. A salaried Bangalore renter without a home loan rarely crosses ₹3L. Same salary, different regime wins.
The 87A trick most people miss
Under New, taxable income up to ₹7 Lakh pays zero tax — the 87A rebate covers the full liability. At ₹7.01L? You pay tax on the slab amount, no rebate. That's a cliff worth ₹25–30K.
If your New-regime taxable income lands at ₹7.1L or ₹7.2L, the extra ₹50K NPS deduction under 80CCD(1B) — which still works in New — can drop you under the cliff. Worth checking.
Switching rules, in one line each
Salaried: flip every year. Pick whichever wins for that year.
Business or profession income: one switch allowed in your filing lifetime. Talk to a CA before flipping.
One last thing
Tax-planning blogs love to tell you "max out your 80C." That advice is incomplete now. If you're filing under New, your 80C investments don't reduce tax at all — they're just savings. Pick PPF or ELSS for the savings reason itself, not because of the tax label.
Updated May 26, 2026. Slabs and standard deduction follow Finance Act 2024 for FY 2025-26 / AY 2026-27. Rules may change in the next Union Budget.