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Old vs new tax regime

3 min readReviewed 2026-05-01SEBI-advisor reviewed

From FY 2023-24, the new tax regime is the default. It has lower slab rates but disallows almost all deductions: no 80C (PPF, ELSS, life insurance premium), no 80D (health insurance), no HRA, no home loan interest under Section 24. The old regime keeps all of those but at higher slabs. Which is better depends entirely on how many deductions you actually claim.

An Indian example

On a ₹15 lakh salary with full ₹1.5 lakh 80C, ₹50,000 80CCD(1B) NPS, ₹25,000 80D, and ₹2 lakh home loan interest claimed: old regime tax is ~₹1.4 lakh. New regime tax is ~₹1.5 lakh. Old wins by a hair. On the same ₹15 lakh with no deductions, new regime wins comfortably (~₹1.5 lakh vs ~₹2.3 lakh).

The common mistake

Switching to the new regime because the headline rates look lower, then realising your home loan interest, HRA, and 80C added up to ₹4 lakh of deductions you just gave up.

Inside Finlo

A 60-second lesson on this, with a worked drill in rupees, lives inside the Finlo app. Free, forever, on the basics.

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