Which tax regime will be best for you after the budget? The break-even point will provide the answer..
Many people were expecting changes to the tax slabs or standard deduction in Budget 2026, but this did not happen. Therefore, the old tax rates and slabs will remain unchanged for the financial year 2026-27. Since the introduction of the Alternative Tax Regime, the government has been making continuous changes to encourage taxpayers to switch to the simpler tax system. As a result, a large number of people have already opted for the new regime, while many are still considering whether the switch would be beneficial for them.
Now that Budget 2026 has been announced and both tax regimes – the old and the new – are in effect, it has become crucial for taxpayers to re-evaluate their options. In this context, an analysis of the break-even point proves helpful. The break-even point is the income level at which the tax liability under both regimes becomes equal. This helps determine which regime would be more advantageous for you.
The table below shows the break-even points for the old and new tax regimes based on different deductions. This approach helps you understand which regime is right for you based on your income and deductions. In this way, taxpayers can decide, according to their spending and savings plans, whether it is more beneficial to remain in the old regime or switch to the new, simpler regime. Table 1: Individuals not eligible for any deductions
Income Tax Liability under the New Tax Regime , Tax Liability under the Normal Tax Regime (for Financial Year 2027-28) , Net Tax Saving
6,00,000 – 33,800 33,800
7,00,000 – 54,600 54,600
8,00,000 – 75,400 75,400
9,00,000 – 96,200 96,200
10,00,000 – 1,17,000 1,17,000
11,00,000 – 1,48,200 1,48,200
12,00,000 – 1,79,400 1,79,400
13,00,000 78,000 2,10,600 1,32,600
14,00,000 93,600 2,41,800 1,48,200
15,00,000 1,09,200 2,73,000 1,63,800
Table 2: Individuals eligible for deductions under Section 123 of the Act 2025 (Section 80C of the 1961 Act)
Income
Tax Liability under the New Tax Regime Tax Liability under the Normal Tax Regime
(for Financial Year 2027-28)
Net Tax Saving
6,00,000 – – –
7,00,000 – 23,400 23,400
7,25,000 – 28,600 28,600
7,50,000 – 33,800 33,800
7,75,000 – 39,000 39,000
8,00,000 – 44,200 44,200
9,00,000 – 65,000 65,000
10,00,000 – 85,800 85,800
11,00,000 – 1,06,600 1,06,600
12,00,000 – 1,32,600 1,32,600
13,00,000 78,000 1,63,800 85,800
14,00,000 93,600 1,95,000 1,01,400
15,00,000 1,09,200 2,26,200 1,17,000
Table 3: Taxpayer eligible for deductions under Sections 123 and 126 of the 2025 Act (Sections 80C and 80D of the 1961 Act)
Income Tax Liability Under the New Tax Regime , Tax Liability Under the Normal Tax Regime (for Financial Year 2027-28) , Net Tax Saving
6,00,000 – – –
7,00,000 – – –
7,50,000 – 23,400 23,400
7,75,000 – 28,600 28,600
8,00,000 – 33,800 33,800
8,50,000 – 44,200 44,200
9,00,000 – 54,600 54,600
9,50,000 – 65,000 65,000
10,00,000 – 75,400 75,400
11,00,000 – 96,200 96,200
12,00,000 – 1,17,000 1,17,000
13,00,000 78,000 1,48,200 70,200
14,00,000 93,600 1,79,400 85,800
15,00,000 1,09,200 2,10,600 1,01,400
Table 4: Taxpayer is eligible for deductions under Sections 123 and 126 and for deduction of interest on housing loan under Section 22(1)(b) of the 2025 Act [Sections 80C, 80D, and 24(b) of the 1961 Act]. Income | Tax Liability Under the New Tax Regime | Tax Liability Under the Normal Tax Regime (for Financial Year 2027-28) | Net Tax Saving
6,00,000 | – | – | –
7,00,000 | – | – | –
8,00,000 | – | – | –
9,00,000 | – | – | –
10,00,000 | – | 33,800 | 33,800
11,00,000 | – | 54,600 | 54,600
12,00,000 | – | 75,400 | 75,400
13,00,000 | 78,000 | 96,200 | 18,200
14,00,000 | 93,600 | 1,17,000 | 23,400
14,50,000 | 1,01,400 | 1,32,600 | 31,200
14,75,000 | 1,05,300 | 1,40,400 | 35,100
15,00,000 | 1,09,200 | 1,48,200 | 39,000
16,00,000 | 1,24,800 | 1,79,400 | 54,600
17,00,000 | 1,45,600 | 2,10,600 | 65,000
18,00,000 | 1,66,400 | 2,41,800 | 75,400
19,00,000 | 1,87,200 | 2,73,000 | 85,800
20,00,000 208,000 304,200 96,200
2,500,000 343,200 460,200 117,000
3,000,000 499,200 616,200 117,000
