Answer
Income tax on ₹25 lakh salary (FY 2025-26): Old vs New regime
At a ₹25 lakh salary in FY 2025-26, the lower tax payable is ₹3,19,800 under the New Regime, saving you ₹1,95,000 per year vs the Old Regime.
Add your actual deductions — HRA, home loan interest, additional 80C — for a precise number.
Open the Income Tax calculatorAt a ₹25 lakh annual salary in FY 2025-26, the Old Regime tax works out to ₹5,14,800 after standard deduction plus typical ₹1.5 lakh 80C and ₹25k 80D investments. The New Regime — with only the larger ₹75,000 standard deduction — works out to ₹3,19,800.
The New Regime saves ₹1,95,000 per year at this salary level. The New Regime is now the default in India, and is generally the better choice unless your total deductions exceed roughly ₹4 lakh.
Note: this comparison assumes the standard ₹1.75 lakh of 80C + 80D deductions on the Old side. If you have a home loan, higher HRA, or significant donations, your Old Regime tax can drop further. Run the full Income Tax calculator with your actual numbers for a precise regime decision.
Related answers
- Income tax on ₹15 lakh salary (FY 2025-26): Old vs New regime→ New saves ₹1,05,300
- Income tax on ₹20 lakh salary (FY 2025-26): Old vs New regime→ New saves ₹1,66,400
- Income tax on ₹30 lakh salary (FY 2025-26): Old vs New regime→ New saves ₹1,95,000
- Income tax on ₹50 lakh salary (FY 2025-26): Old vs New regime→ New saves ₹1,95,000
Frequently asked questions
Which regime is better for a ₹25 lakh salary?
The New Regime is better at this income level, saving ₹1,95,000 per year. The New Regime works for most salaried Indians; the Old Regime wins only when total deductions exceed roughly ₹4 lakh.
What deductions are assumed in the Old Regime calculation?
Standard deduction ₹50,000 + Section 80C ₹1.5 lakh + Section 80D ₹25,000 = ₹2.25 lakh total deductions. If you have additional deductions like HRA exemption, home loan interest under Section 24(b), or 80CCD(1B) NPS, your Old Regime tax will be lower than shown.
Is there a tax rebate for income up to ₹12 lakh under the New Regime?
Yes. For FY 2025-26, the New Regime gives a Section 87A rebate that fully wipes out tax for taxable incomes up to ₹12 lakh (or ₹12.75 lakh gross salary including the ₹75,000 standard deduction). Above that, normal slab rates apply.
Do I need to declare a regime choice?
Yes. Salaried individuals can choose either regime each year while filing ITR. Business owners can opt out of the New Regime only once and then revert with restrictions. Most salaried Indians benefit from the New Regime in FY 2025-26 unless they have significant deductions.