Old vs new tax regime: how to actually decide

The new regime offers wider slabs and a higher standard deduction for salaried taxpayers, while the old regime allows deductions such as 80C, 80D, HRA and interest on a housing loan. Neither is universally better.

A practical approach is to compute both. Start from gross salary, add other income, then apply the deductions you can genuinely substantiate. If your verifiable deductions are modest, the new regime usually wins. If you pay significant rent, home loan interest and insurance premiums, the old regime can still be more efficient.

Two things are commonly missed. First, the decision affects the whole year, so it is better made in April than in March. Second, salaried taxpayers can choose at the time of filing, but the declaration made to the employer decides how much TDS is deducted each month — a mismatch means either a refund wait or a shortfall.

If you are unsure, run your numbers through the income tax calculator on this site for an indicative comparison, then speak to us before you submit your declaration.