The old tax regime is no longer the default, but it still exists for FY 2025-26 (AY 2026-27), and for people with large deductions it can save more tax than the new regime. Its value lies in the deductions it allows, 80C, 80D, HRA, home loan interest, and more. In this article we will talk about the old regime slabs, the rebate, and every major deduction you can claim.
For the new regime, see our new tax regime slabs guide. To compare the two, see our old vs new tax regime guide.
Key takeaways
- Old regime slabs are unchanged: nil up to ₹2.5 lakh, then 5%, 20%, and 30%.
- The basic exemption is higher for older taxpayers, ₹3 lakh for ages 60–80 and ₹5 lakh for those above 80.
- The Section 87A rebate makes taxable income up to ₹5 lakh tax-free.
- The old regime allows the full set of deductions, 80C, 80D, HRA, home loan interest, NPS, and more.
Old tax regime slabs (FY 2025-26)
| Income slab | Tax rate |
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
These slabs apply to individuals below 60. Older taxpayers get a higher basic exemption:
| Category | Basic exemption |
| Individuals below 60 | ₹2,50,000 |
| Senior citizens (60–80) | ₹3,00,000 |
| Super senior citizens (above 80) | ₹5,00,000 |
A 4% health and education cess applies on the final tax, the same as in the new regime.
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Book a free consultationThe Section 87A rebate
Under the old regime, the Section 87A rebate is up to ₹12,500, which makes taxable income up to ₹5 lakh tax-free for resident individuals. Beyond ₹5 lakh of taxable income, the rebate does not apply. This is smaller than the new regime’s rebate, which covers income up to ₹12 lakh.
Standard deduction
Salaried individuals and pensioners get a standard deduction of ₹50,000 under the old regime. It is subtracted from your salary before tax is calculated. (The new regime gives a higher standard deduction of ₹75,000.)
Deductions you can claim under the old regime
This is what sets the old regime apart. The main deductions are below.
| Deduction | Section | Limit |
| Investments (PPF, EPF, ELSS, life insurance, home loan principal, tuition fees, tax-saver FD, NSC, Sukanya Samriddhi) | 80C | ₹1,50,000 |
| Additional NPS contribution (self) | 80CCD(1B) | ₹50,000 |
| Employer’s NPS contribution | 80CCD(2) | Up to 10% of salary (14% for government employees) |
| Health insurance premium (self and family) | 80D | ₹25,000 (₹50,000 if senior citizen) |
| Health insurance premium (parents) | 80D | Additional ₹25,000 (₹50,000 if parents are senior) |
| Home loan interest (self-occupied) | 24(b) | ₹2,00,000 |
| House Rent Allowance | 10(13A) | Least of the three prescribed amounts |
| Education loan interest | 80E | No upper limit, for up to 8 years |
| Interest on savings account (non-seniors) | 80TTA | ₹10,000 |
| Interest income (senior citizens) | 80TTB | ₹50,000 |
| Donations to eligible funds | 80G | 50% or 100% of the donation, as specified |
Other deductions, such as Section 80GG for rent when you do not get HRA, and Sections 80U, 80DD, and 80DDB for disability and specified medical conditions, may also apply depending on your situation.
Surcharge and cess
For higher incomes, a surcharge applies on the tax: 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore, and 37% above ₹5 crore. Unlike the new regime, the old regime keeps the 37% top surcharge rate. A 4% Health and Education Cess is added on the tax plus surcharge.
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Worked example
Take a salaried person earning ₹12 lakh who claims a full set of deductions: the ₹50,000 standard deduction, ₹1,50,000 under 80C, ₹50,000 under 80CCD(1B) for NPS, ₹25,000 under 80D, and ₹2,00,000 of home loan interest under Section 24(b). That is ₹4,75,000 in deductions, leaving taxable income of ₹7,25,000.
The tax is nil on the first ₹2.5 lakh, ₹12,500 on the ₹2.5–5 lakh slab (5%), and ₹45,000 on the remaining ₹2.25 lakh (20%) — ₹57,500 in total, or ₹59,800 after cess.
The same person under the new regime, with a salary of ₹12 lakh and only the standard deduction, would pay no tax at all because of the ₹12 lakh rebate. This shows the key point: the old regime helps only when your deductions are large enough to beat the new regime’s lower rates and rebate. Our old vs new regime calculator can help you decide better.
Who should consider the old regime?
The old regime tends to work better if you pay home loan interest, claim significant HRA, invest the full ₹1.5 lakh under 80C, pay health insurance premiums, and contribute to NPS. If you have several of these together, your deductions may cross the level where the old regime wins. If you have few deductions, the new regime’s lower rates usually save more.
The new regime is the default. If you are salaried with no business income, you can choose the old regime each year while filing. If you have business or professional income, you must file Form 10-IEA before the due date to opt for the old regime, and once you switch back to the new regime you generally cannot return to the old one.
A note on using deductions well
The old regime rewards deductions, which is useful — but only when the spending or investment behind a deduction makes sense for you. A home loan for a home you want, health cover your family needs, and retirement savings you would make anyway all earn their deduction honestly. Buying a product you do not need just to claim a deduction usually costs more in poor returns or locked-up money than it saves in tax. Choose the old regime because your genuine deductions are large, not as a reason to create deductions you would otherwise avoid.
Frequently asked questions on old tax regime slabs
What are the old tax regime slabs for FY 2025-26?
Nil up to ₹2.5 lakh, 5% from ₹2.5–5 lakh, 20% from ₹5–10 lakh, and 30% above ₹10 lakh, plus 4% cess. Senior citizens (60–80) have a ₹3 lakh exemption and super seniors (above 80) a ₹5 lakh exemption.
Which deductions are allowed in the old regime?
The full set, including Section 80C (up to ₹1.5 lakh), 80CCD(1B) for NPS (₹50,000), 80D for health insurance, HRA, home loan interest under 24(b) (up to ₹2 lakh), 80E, 80G, and 80TTA/80TTB on interest income.
Is the old regime still available in AY 2026-27?
Yes. The old regime continues with the same slabs and deductions. It is no longer the default, so you must actively choose it.
How much income is tax-free under the old regime?
Taxable income up to ₹5 lakh is tax-free because of the Section 87A rebate. For a salaried person, the ₹50,000 standard deduction plus other deductions can raise the tax-free salary further, depending on what you claim.
How do I choose the old regime?
The new regime is the default. Salaried taxpayers can select the old regime while filing each year. Those with business income must file Form 10-IEA before the due date.
Is the old or new regime better?
It depends on your deductions. The old regime wins only when they are large; otherwise the new regime’s lower rates and ₹12 lakh rebate save more. Compare both before choosing.
Sources and references
- Income Tax Department, e-filing portal — incometax.gov.in
- Income Tax Act, 1961 — Sections 87A, 80C, 80CCD, 80D, 24(b), 10(13A), 80E, 80G, 80TTA, 80TTB
- Slab rates and deduction limits as provided under the Income Tax Act for FY 2025-26
Disclaimer
This guide is for general informational purposes and is accurate to the best of our knowledge as of June 2026. The tax figures are illustrative and assume the stated income and deduction levels; your actual tax depends on your full income, deductions, surcharge, and other factors. Tax laws can change, and individual circumstances vary. Please verify current details on incometax.gov.in and consult a qualified Chartered Accountant or tax advisor before acting on any information here.
