Old vs new regime - when to choose what

ThynkTax runs both regimes automatically for every salaried client and surfaces the lower-tax option. Here are the heuristics for when each typically wins.

New regime tends to win when

• Total income up to ₹12 lakh (zero tax via Section 87A / 157 rebate)
• Salary < ₹15 lakh with no home loan and limited 80C exhaustion
• Freelancer / professional with no Chapter VI-A deductions
• Salaried with predominantly rented accommodation (HRA already optimised) but no other significant deductions

Old regime tends to win when

• Significant 80C + 80D + Section 24(b) deductions stacking (~₹3.75L+)
• HRA exemption is substantial (metro rent close to 50% of basic+DA)
• Home loan interest at the ₹2L cap (self-occupied)
• NPS additional ₹50K under 80CCD(1B)

The exact break-even depends on

• Salary level (slab boundary effects)
• Surcharge applicability (new regime caps at 25%; old at 37%)
• LTCG / STCG income (taxed separately, regime-agnostic)

How to lock the regime

• Salaried: declare to employer at the start of the FY via Form 12BB; also file Form 10IEA with the ITR
• Business income: opting into old regime requires Form 10IEA. Can switch only once from new to old in your lifetime.

In ThynkTax

The ITR computation page shows tax under both regimes side-by-side. The "Recommend old" / "Recommend new" badge appears with a tooltip explaining the swing.