"Should I take the old regime or the new one?" is answered almost everywhere with a worked example — one salary, one set of deductions, one answer. That tells you about that person. It does not tell you where the boundary is.
So we computed the boundary. Every figure on this page comes from the FY 2026-27 (AY 2027-28) slabs and has been checked against our own old-vs-new regime calculator, which you can use to reproduce any row.
The finding: the old regime does not simply "win once you have enough deductions". Even with deductions maxed, it wins in two separate bands with a new-regime island between them — cheaper from roughly ₹13,00,000 to ₹16,50,000, more expensive from about ₹16,75,000 to ₹25,00,000, then cheaper again from about ₹25,25,000 upward, with the gap widening as salary rises.
The chart
Above the zero line the old regime costs less; below it the new regime does. The shaded bands are where old wins.
Metro city. Basic pay taken as 50% of gross, HRA component as 50% of basic, Section 80C fully used at ₹1,50,000 and 80D at ₹25,000. Includes 4% health and education cess and the Section 87A rebate.
Why it behaves this way
Two forces pull against each other as salary rises, and they do not move at the same rate.
The old regime's biggest deduction scales with salary. The HRA exemption is capped at 50% of basic pay in a metro. If basic is half of gross, that cap is a quarter of gross — it grows every time your salary does. The new regime's only deduction is a flat ₹75,000 standard deduction that never grows at all.
But the old regime's slabs are far harsher. Its 30% rate begins at ₹10,00,000. The new regime's does not begin until ₹24,00,000. Across the middle of the range, that difference is brutal.
Below about ₹12 lakh neither matters, because the Section 87A rebate wipes the liability out under the new regime anyway. Between roughly ₹13 and ₹16.5 lakh the deductions are enough to drag old-regime taxable income down into its 20% band while the new regime is already paying 15% on a much larger base, and old wins. Push past that and old-regime taxable income crosses ₹10 lakh into the 30% band while the new regime is still in its 15–20% bands — new wins, by as much as ₹10,400 at ₹20 lakh. Keep going and the HRA exemption, now worth ₹6 lakh, ₹7.5 lakh, ₹10 lakh in absolute terms, finally outweighs the slab disadvantage. Old wins again and never gives it back.
The numbers behind the chart
Rent at the HRA cap, metro, deductions as stated above.
| Gross salary | HRA exempt | Old regime tax | New regime tax | Cheaper by |
|---|---|---|---|---|
| ₹15,00,000 | ₹3,75,000 | ₹96,200 | ₹97,500 | Old, ₹1,300 |
| ₹20,00,000 | ₹5,00,000 | ₹2,02,800 | ₹1,92,400 | New, ₹10,400 |
| ₹25,00,000 | ₹6,25,000 | ₹3,19,800 | ₹3,19,800 | Exactly level |
| ₹30,00,000 | ₹7,50,000 | ₹4,36,800 | ₹4,75,800 | Old, ₹39,000 |
| ₹40,00,000 | ₹10,00,000 | ₹6,70,800 | ₹7,87,800 | Old, ₹1,17,000 |
| ₹50,00,000 | ₹12,50,000 | ₹9,04,800 | ₹10,99,800 | Old, ₹1,95,000 |
₹25,00,000 is not a rounding artefact. At that salary the two regimes produce identical liabilities of ₹3,19,800 — the calculator itself reports the result as "line ball".
How much rent you need for the old regime to be worth it
Turning the question around: at a given salary, what is the minimum monthly rent that makes the old regime cheaper? Below these figures, the new regime wins no matter what else you claim.
| Gross salary | Minimum monthly rent (metro) | As a share of gross |
|---|---|---|
| ₹15,00,000 | ₹37,000 | 29.6% |
| ₹20,00,000 | No rent is enough — new regime wins outright | |
| ₹25,00,000 | Level at the cap; new regime wins below it | |
| ₹30,00,000 | ₹64,600 | 25.8% |
| ₹40,00,000 | ₹68,800 | 20.6% |
| ₹50,00,000 | ₹73,000 | 17.5% |
Two things are worth sitting with. At ₹15 lakh you need to be paying nearly 30% of your gross salary in rent before the old regime pays off — and the margin when you get there is ₹1,300 a year, which is noise. And at ₹20 lakh there is no rent high enough: the exemption is capped at 50% of basic, and even at that cap the new regime still wins.
Outside a metro, the picture is much simpler
Everything above assumes a metro, where the HRA exemption is capped at 50% of basic pay. Outside one the cap is 40%, and that single change removes the middle band entirely.
| Gross salary | Old regime tax | New regime tax | Cheaper by |
|---|---|---|---|
| ₹20,00,000 | ₹2,34,000 | ₹1,92,400 | New, ₹41,600 |
| ₹30,00,000 | ₹4,83,600 | ₹4,75,800 | New, ₹7,800 |
| ₹40,00,000 | ₹7,33,200 | ₹7,87,800 | Old, ₹54,600 |
| ₹50,00,000 | ₹9,82,800 | ₹10,99,800 | Old, ₹1,17,000 |
Non-metro, there is exactly one crossover, at about ₹31,50,000. Below it the new regime wins at every salary; above it the old regime does. The two-band behaviour is a metro phenomenon — it exists only because the extra 10 percentage points of HRA cap are just enough to tip the ₹13–16.5 lakh range, and not enough to hold it through the twenties.
Put plainly: if you do not live in a metro, the answer is the new regime unless you are earning well over ₹30 lakh.
What this changes in practice
If you earn under about ₹12 lakh, stop reading and take the new regime. The rebate takes your liability to nil and no amount of deduction planning improves on nil.
If you are between roughly ₹17 and ₹25 lakh, the new regime is very likely right even if you rent expensively in a metro and max your 80C. This is the group most often given the wrong advice, because "I have lots of deductions so old must be better" is intuitive and, in this band, wrong.
If you earn well above ₹25 lakh and rent in a metro, the old regime is worth modelling properly — the gap reaches ₹1,95,000 a year at ₹50 lakh, which is real money and grows.
Method, and what this model leaves out
The point of publishing the method is that you can disagree with it.
- Slabs. FY 2026-27 (AY 2027-28). Budget 2026 left rates unchanged, so these are the same slabs that applied in FY 2025-26. New regime: nil to ₹4L, then 5/10/15/20/25/30% in ₹4L steps to ₹24L. Old: nil to ₹2.5L, 5% to ₹5L, 20% to ₹10L, 30% above.
- Standard deduction. ₹75,000 new, ₹50,000 old.
- Rebate. Section 87A applied at ₹12,00,000 taxable under the new regime and ₹5,00,000 under the old.
- Cess. 4% health and education cess on the computed tax. Note it cannot move a crossover — a uniform multiplier applied to both sides leaves the point where they are equal exactly where it was.
- HRA exemption. Least of the three statutory limbs: HRA received; rent minus 10% of basic; 50% of basic (metro) or 40% (non-metro).
- Assumed structure. Basic at 50% of gross, HRA component at 50% of basic. Both are common but neither is universal — your payslip governs.
- Not modelled: surcharge above ₹50 lakh, NPS under 80CCD(1B) and 80CCD(2), home loan interest under Section 24(b), and any deduction beyond 80C and 80D. Every one of these helps the old regime, so the bands here are, if anything, conservative about how often old wins.
Because the assumptions above are all generous to the old regime, treat the two bands as a best case for it. Where the model says new wins, it wins comfortably.