A concise comparison of the Old and New Tax Regimes for FY 2026-27, highlighting key differences in deductions, exemptions, and overall tax benefits to help you choose the most suitable option.
Deepak Gupta | Apr 17, 2026 |
Old vs New Tax Regime for Tax Year 2026-27
| Old vs New Tax Regime (TY 2026–27) | ||
| Particulars | Old Tax Regime | New Tax Regime |
| Income level for rebate eligibility | Rs 5 lakhs | Rs 12 lakhs |
| Standard Deduction | Rs. 50,000 | Rs 75,000 |
| Effective Tax-Free Salary income | Rs 5.5 lakhs | Rs 12.75 lakhs |
| Rebate u/s 87A | Rs. 12,500 | Rs 60,000 |
| HRA Exemption | Allowed | Not Allowed |
| Leave Travel Allowance (LTA) | Allowed | Not Allowed |
| Other allowances, including food allowance of Rs 200/meal, subject to 2 meals a day (Sodexo) | Allowed | Allowed |
| Entertainment Allowance and Professional Tax | Allowed | Not Allowed |
| Perquisites for official purposes (Car Lease) | Allowed | Allowed |
| Interest on Home Loan u/s 24b on: Self-occupied or vacant property | Allowed | Not Allowed |
| Interest on Home Loan u/s 24b on: Let-out property | Allowed | Allowed |
| Deduction u/s 80C (EPF, LIC, ELSS, PPF, FD, Children’s tuition fee etc) | Allowed | Not Allowed |
| Employee’s (own) contribution to NPS u/s 80CCD(1B) | Allowed | Not Allowed |
| Employer’s contribution to NPS u/s 80CCD(2) | Allowed | Allowed |
| Medical insurance premium – 80D | Allowed | Not Allowed |
| Disabled Individual – 80U | Allowed | Not Allowed |
| Interest on education loan – 80E | Allowed | Not Allowed |
| Interest on Electric vehicle loan – 80EEB | Allowed | Not Allowed |
| Donation to Political party/trust etc – 80G | Allowed | Not Allowed |
| Savings Bank Interest u/s 80TTA and 80TTB | Allowed | Not Allowed |
| Other Chapter VI-A deductions | Allowed | Not Allowed |
| All contributions to Agniveer Corpus Fund – 80CCH | Allowed | Allowed |
| Deduction on Family Pension Income | Allowed | Allowed |
| Gifts upto Rs 50,000 | Allowed | Allowed |
| Exemption on voluntary retirement 10(10C) | Allowed | Allowed |
| Exemption on gratuity u/s 10(10) | Allowed | Allowed |
| Exemption on Leave encashment u/s 10(10AA) | Allowed | Allowed |
| Daily Allowance | Allowed | Allowed |
| Conveyance Allowance | Allowed | Allowed |
| Transport Allowance for a specially-abled person | Allowed | Allowed |
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