If you earn around ₹15 lakh, the regime choice could mean ₹40,000+ difference in annual tax. Here is the exact math.

The one-minute answer

For a salaried individual earning ₹15 lakh CTC, the new regime is almost always better — unless you claim more than ₹3.75 lakh in old-regime-only deductions (80C + 80D + HRA + home loan interest + NPS). Most salaried Indians do not.

Side-by-side comparison at ₹15 lakh salary

ParameterNew RegimeOld Regime (with ₹2L deductions)
Gross Income₹15,00,000₹15,00,000
Standard Deduction₹75,000₹50,000
80C (PPF, ELSS, EPF)Not allowed₹1,50,000
80D (Health Insurance)Not allowed₹25,000
Taxable Income₹14,25,000₹12,75,000
Tax before cess₹1,30,000₹2,02,500
Rebate (87A)Nil (above ₹12L)Nil (above ₹5L)
Cess (4%)₹5,200₹8,100
Total Tax₹1,35,200₹2,10,600

In this example the new regime saves ₹75,400. The old regime only wins if the employee can produce enough deductions to bring taxable income below ₹12 lakh — which usually requires HRA and home loan interest on top of the basics.

The break-even formula

At any CTC, the old regime becomes better when:

Total old-regime deductions > ₹3,75,000 (approximately)

That includes 80C (₹1.5L) + 80D (₹25-50k) + standard deduction differential (₹25k difference already baked in) + HRA exemption + home loan interest (₹2L max). High-income metro residents with a home loan and full 80C usually cross this threshold easily.

When to stay on Old Regime

  • You live in a metro and claim HRA of ₹2L+ annually
  • You have a home loan with ₹1.5L+ in annual interest
  • You max out 80C via ELSS/PPF/EPF
  • You pay health insurance premiums for self + parents (80D)
  • You contribute to NPS (80CCD(1B)) for ₹50k

When to switch to New Regime

  • You rent but cannot claim HRA (self-employed)
  • Your 80C is limited to EPF only (₹30-60k)
  • No home loan
  • Younger employees early in career

Still unsure? Run both: New Regime Calculator and Old Regime Calculator. Pick the one that shows lower tax.