The question
1 answer
Practising chartered accountants at ERPCA · 21 Jul 2026
In short
Run the numbers both ways; with your figures the new regime still wins, but it is closer than most people expect.
New regime (the slabs introduced by Finance Act 2025): ₹14 lakh less the ₹75,000 standard deduction gives ₹13.25 lakh taxable. Tax is nil to ₹4 lakh, 5% on the next ₹4 lakh (₹20,000), 10% on the next ₹4 lakh (₹40,000) and 15% on the remaining ₹1.25 lakh (₹18,750): ₹78,750, plus 4% cess, about ₹81,900. No other deductions are allowed, and the ₹12 lakh rebate does not apply because you are above it.
Old regime: ₹14 lakh less ₹50,000 standard deduction, ₹1.5 lakh under 80C, ₹2 lakh under 24(b) and ₹25,000 under 80D leaves ₹10.25 lakh before HRA. HRA exemption is the least of actual HRA received, rent paid minus 10% of basic, and 50% of basic (Mumbai). With a typical ₹7 lakh basic that works out to about ₹2.66 lakh, taking taxable income to roughly ₹7.6 lakh and tax to about ₹67,000 after cess. So the old regime can beat the new one for you, by around ₹15,000, but only if your HRA component and basic are large enough to produce that exemption. If HRA is small or absent, the new regime is better.
Rule of thumb at ₹14 lakh: total deductions and exemptions need to exceed roughly ₹5.7 lakh for the old regime to win.
Next step
Ask payroll for your basic and HRA split, redo the HRA sum, and give the declaration before the next payroll cycle. As a salaried person you can choose either regime every year in the return itself, but the employer's TDS will follow whatever you declare.
General guidance on the facts given, not an engagement. Law as on the date of the answer.
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