Tax Consultant
1312 Points
Posted on 23 June 2026
New regime is now the default for AY 2026-27. Here is how to decide:
New regime works better if:
- Your total investments and deductions (80C, HRA, home loan) are less than Rs 3.75 lakh
- You want simplicity and lower compliance
- Income up to Rs 12 lakh (plus Rs 75,000 standard deduction = Rs 12.75 lakh effective zero-tax)
Old regime works better if:
- You have substantial 80C investments (Rs 1.5 lakh), HRA exemption, and home loan interest
- Combined deductions exceed Rs 3.75 lakh
For salaried: you must communicate your regime choice to your employer before the start of the financial year for TDS purposes. You can switch at ITR filing time if you have no business income.
For those with business income (ITR-3): once you opt out of new regime by filing Form 10-IEA, you can only return to new regime once and cannot switch again.
This [old vs new regime comparison](taxgarden.in/blog/old-vs-new-tax-regime-ay-2026-27-which-is-better) has a slab-wise calculation to show which saves more based on income level.