Old regime or new, for Tax Year 2026-27? Here is the number you have to beat.

Every year somebody in the group chat asks which regime to pick, and every year the answer comes back as “depends on your deductions”. Which is correct, and completely useless, because the follow-up question is the only one that matters: depends how much?

There is a number going around for that - ₹3,75,000 of deductions is where the old regime supposedly overtakes. It is a reasonable rule of thumb and it is wrong for almost every salary, usually by lakhs. Here is the computed version, and the one thing that genuinely changed in April.

Under ₹12,75,000, there is nothing to decide

The new regime gives a salaried person a ₹75,000 standard deduction and then, under Section 156, a ₹60,000 rebate on taxable income up to ₹12,00,000. Add those together and salary up to ₹12,75,000 pays nothing at all.

Which means for most of the country the comparison never starts. Below that line the old regime cannot win; it can at absolute best draw.

Put your own salary in

This is the same arithmetic as the table, and the same engine the rest of the site runs on. Type your gross, then put every old-regime deduction you actually claim - Section 123, Section 124, health insurance, HRA exemption, home loan interest - into the second field. Nothing you type leaves your browser.

Open “show the working” on either card and it walks the slabs band by band. That is there because a tax total you cannot check is a total you have to take on faith, and this site has not earned anybody’s faith yet.

The break-even is not one number, and it does not rise smoothly

Look again at the last column of that table. At ₹15,00,000 the old regime overtakes at ₹5,42,000 of deductions. At ₹18,00,000 it needs ₹6,40,000. But at ₹13,00,000 - a lower salary - it needs ₹6,90,000, more than either.

A break-even that goes down as your salary goes up is not a bug. It is marginal relief.

Just above ₹12,75,000 the new regime’s marginal relief caps the tax at the amount by which you crossed the line. Earn ₹5,000 over and the bill is ₹5,000; earn ₹25,000 over and it is ₹25,000. The new regime is holding your tax artificially low in that band, so the old regime has an unusually hard target to beat.

The relief stops binding at about ₹13,48,900 of salary, where ordinary slab tax finally comes in below the cap - which is why ₹13,50,000 pays ₹74,100 rather than a round ₹75,000. So the distortion is real but narrow: ₹12,75,000 to roughly ₹13,49,000. If your salary sits inside it, the old regime is almost certainly not worth electing.

Add up what you can actually claim

Now the other half. The break-evens above are between ₹5,42,000 and ₹7,98,000. Here is the deduction stack a salaried person without rent realistically has.

Fully maxed - every instrument at its ceiling, plus a home loan - that is ₹4,25,000. Which is still short of every break-even above ₹13,00,000. Without the home loan it is ₹2,25,000, and it is not close.

The new regime wins every row, and it wins by more as salary rises. This is the part the ₹3,75,000 rule of thumb hides: for a salaried person who does not pay rent, the old regime has essentially stopped being a decision.

HRA is the whole difference, and it just got bigger

Everything above left out house rent allowance, because HRA is not a deduction - it is an exemption, carved out of salary before tax is computed at all. It is also, for a renter in a large city, far bigger than anything in Chapter VIII.

Under the 1961 Act it lived in Section 10(13A). The 2025 Act did not renumber it so much as relocate it: the old Section 10 exemptions became Schedule II, so HRA is now found in a schedule rather than a section. The exemption is the least of three amounts.

The middle test is the one that changed. From 1 April 2026, four more cities moved from 40% to 50%.

The same person, before and after the city list changed

Take a salaried engineer in Bengaluru on ₹18,00,000, with basic salary at half of that, HRA of ₹4,50,000 on the payslip, and ₹55,000 a month of rent. She also maxes Section 123, Section 124 and health insurance.

Her old-regime stack goes from ₹5,85,000 to ₹6,75,000. That is the whole change - one line, one city reclassification. And it is enough.

Nothing about her salary changed. The answer changed because her city did.

A ₹28,080 swing on one rule change, and it crosses the line. If you rent in one of those four cities and last checked which regime suited you before April, your answer may now be out of date - and the default is the new regime, so being out of date costs you money silently.

So: which one

Three questions, in this order, and most people stop at the first.

None of which is a recommendation about what to buy. It is the shape of the arithmetic, and the arithmetic is the same for everybody with the same numbers - which is exactly why it is worth checking your own rather than borrowing a colleague’s conclusion.

What the renumbering did not do

Worth saying plainly, because the two changes of April 2026 keep getting reported as one. The Income-tax Act, 2025 renamed sections: 115BAC became Section 202, 87A became 156, and 80C became Section 123. It moved no money. Every slab, both standard deductions, the rebate and the cess are what they were.

The HRA city list is the change that moves money, and it is not in the Act at all - it is in the Rules under it. One of those two headlines deserved the coverage it got.