A reader says, “I understand that the new tax regime is better than the old one because it does away with tax-deductible investments or purchases (80C, 80D, home loan interest, etc). However, I am used to investing in such instruments, and since I will continue to use them, is there any way to find out the total tax deductions necessary for using the old tax regime?”
The old tax regime may not exist in the future, or the government can make the new tax regime more attractive. Therfore, the new tax regime is an attractive choice for those who do not have a large home loan interest component (plus other deductions).
Our free calculators are the best way to determine which regime suits you.
Old tax regime vs new tax regime calculator (please let me know if there are any bugs). Credits: The calculator was authored by Vinay Vittal and modified for those with more than 50L income by Balasubrahmanyan. I have combined the two in the same sheet.
Finding out the total tax deduction investments or purchases necessary to opt for the old tax regime is still interesting.
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Salaried taxpayers:
If your total deductions (excluding standard deduction and employer contribution to NPS) are higher than the ones listed below for your salary level, then the old tax regime is beneficial. If it is lower, the new tax regime is beneficial.
| Gross Income in Lakhs minus employer contribution to NPS if applicable | Break-even deductions (excluding standard deduction and employer contribution to NPS) in Lakhs |
| 8 | 1.625 |
| 8.5 | 1.875 |
| 9 | 2.125 |
| 9.5 | 2.375 |
| 10 | 2.5 |
| 10.5 | 2.625 |
| 11.5 | 2.875 |
| 12.5 | 3.125 |
| 14 | 3.25 |
| 14.5 | 3.5 |
| 15.5 | 3.75 |
| 17 | 3.75 |
| 18 | 3.75 |
| 25 | 3.75 |
Non-salaried taxpayers:
| Gross Income in Lakhs | Break-even deductions in Lakhs |
| 7.5 | 1.625 |
| 8 | 1.875 |
| 8.5 | 2.125 |
| 9 | 2.375 |
| 9.5 | 2.5 |
| 10 | 2.625 |
| 10.5 | 2.875 |
| 11.5 | 3.125 |
| 12.5 | 3.25 |
| 14.25 | 3.5 |
| 14.5 | 3.75 |
| 15.5 | 3.75 |
| 17 | 3.75 |
| 18 | 3.75 |
We recommend young earners opt for the new regime. This way, there is no need to buy any tax-saving products.