Guide to Income & Taxes
Old vs new regime, 80C, HRA, capital gains — what every Indian taxpayer actually needs to know.
Tax isn't about loopholes. It's about using the deductions the law has already written for you. Spend one hour understanding the basics and you'll save 5–15% of your income, every year, for the rest of your career.
⚖️Old regime vs new regime
Since FY 2023-24, the new regime is default. But that doesn't mean it's better for you.
- Old regime — Higher slab rates, but you can claim 80C (₹1.5L), HRA, home-loan interest, NPS, medical insurance. Better if your deductions exceed ~₹3L.
- New regime — Lower slab rates, no deductions except standard deduction (₹75k) and employer NPS. Better for renters with low investments.
- How to choose — Add up your deductions for the year. If they exceed ₹3 lakh, old regime usually wins. If not, new regime is simpler and lower-tax.
💼Section 80C — your ₹1.5 lakh shelter
Old-regime only. Mix and match these to hit the ₹1.5 lakh cap.
- EPF — Your salary's auto-contribution counts.
- PPF — 7.1% tax-free, 15-year lock-in. Safe and steady.
- ELSS mutual funds — 3-year lock-in, equity returns, fastest-growing 80C option.
- Home-loan principal — Already paying? Already counts.
- Term-insurance premium — Yes, your premium is deductible too.
📈Capital gains 101
Tax on profit from selling shares, mutual funds or property — and the rates changed in July 2024.
- Equity short-term (< 1 year) — 20% flat tax on gains.
- Equity long-term (> 1 year) — 12.5% on gains above ₹1.25 lakh per year.
- Debt funds — Always taxed at your slab rate, no matter how long you hold.
- Property — 12.5% LTCG without indexation, or 20% with indexation (only for property bought before July 2024).
Risk & 5-Year Returns
How these compare
Indicative 5-year CAGR (2020–2025) and typical risk for the instruments discussed in this topic.
| Instrument | 5Y CAGR | Risk |
|---|---|---|
PPF 15-yr lock-in. EEE tax status. | 7.1% | Low |
EPF Salaried only. EEE up to ₹2.5L/yr contribution. | 8.15–8.25% | Low |
Past returns do not predict future results.
See full comparison on Portfolio →Interactive tool
Which tax regime is cheaper for you?
Enter your salary and the deductions you actually claim. We compute FY 2025-26 tax under both regimes and show the winner, your saving, and your break-even.
Tax Regime Quiz
Old or new tax regime — which one saves you more?
Answer with rough numbers for FY 2025-26. We compute the tax under both regimes and show which one wins, and by how much.
Step 1 — your income
Step 2 — deductions you actually claim
These only count under the old regime. Enter 0 for anything you don't claim.
Educational estimate using FY 2025-26 slabs for a salaried resident under 60. Surcharge on income above ₹50 lakh, capital gains, and business income are not modelled. Confirm with a CA before filing.
Go deeper
Income Tax in India — Old vs New Regime, Deductions & Filing
The 2025-26 tax playbook for salaried Indians: which regime to pick, every deduction that still works, and how to file without an agent.
Micro Pro Tips
- 📅File by July 31 — Late filing fee is ₹5,000 — and you lose the right to carry forward losses.
- 🏠Claim HRA even without rent receipts up to ₹3k/mo — Above that, get a signed receipt with the landlord's PAN if rent > ₹1 lakh/year.
- 🧾Save Form 16 and 26AS — Cross-check what your employer reported against what the IT department sees. Mismatches cause notices.