There's no universally better regime — only the one that's better for your numbers. Here's the approach I use with clients instead of relying on rules of thumb.
Start with your actual deductions
The old regime only wins if you genuinely use its deductions. Add up what you really claim — 80C, 80D, home loan interest, HRA — not what you could theoretically claim.
Then compare both, properly
- New regime — lower slab rates, higher standard deduction, but almost no other deductions.
- Old regime — higher rates, but rewards you for the deductions you actually claim.
- The break-even — depends entirely on your deduction total — run both, don't guess.
Run the numbers both ways every year. The regime that suited you last year can flip the moment your home loan closes or your investments change.
In short
Total up the deductions you genuinely use, compute tax under both regimes, and pick the lower number. It's a five-minute calculation that's worth doing properly.
Independent Chartered Accountant. I write short, practical notes on tax, GST and compliance — and I'm always happy to answer a real question.
