What 'default' actually means here
The Finance Act 2023 inserted section 115BAC(1A) into the Income-tax Act, 1961 and flipped the burden of choice. From FY 2023-24 the new regime is the position the law assumes you are in. You do not opt into it; you opt out if you would rather be taxed under the old regime. If you file your return and make no election, your tax is computed on the new-regime slabs automatically.
This matters for the returns being filed right now. FY 2025-26 (assessment year 2026-27) is still governed by the Income-tax Act, 1961 — the new Income-tax Act, 2025 takes effect only from FY 2026-27 onwards, so it does not change how this year's return is computed.
is the statutory due date under section 139(1) for filing the FY 2025-26 return for individuals not subject to audit — CBDT has extended this date in recent years, so check the e-filing portal for any current-year notification. The regime you are taxed under is settled in that return, so the choice is made — actively or by silence — on or before that date.
FY 2025-26 slabs under both regimes
The new regime carries seven bands and a generous rebate; the old regime keeps the older three-rate structure but lets you claim deductions the new regime does not.
| Total income | Tax rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
| Aspect | Old regime | New regime (default) |
|---|---|---|
| Basic exemption | ₹2,50,000 (₹3,00,000 senior, ₹5,00,000 super-senior) | ₹4,00,000 for everyone |
| Standard deduction (salaried) | ₹50,000 | ₹75,000 |
| Section 87A rebate | Up to ₹12,500 for income ≤ ₹5,00,000 | Up to ₹60,000 for income ≤ ₹12,00,000 |
| Chapter VI-A deductions (80C, 80D, HRA, 24(b)) | Available | Not available |
| Top surcharge | 37% above ₹5 crore | Capped at 25% |
The zero-tax outcome that draws most salaried readers to the new regime comes from stacking the standard deduction onto the rebate threshold:
Taxable income = Gross salary − ₹75,000 (standard deduction)- ₹75,000
- Standard deduction allowed to salaried taxpayers and pensioners in the new regime
- ₹12,00,000
- Income ceiling up to which the full section 87A rebate (up to ₹60,000) applies
Which regime is better for you
There is no universal winner. The new regime suits taxpayers who claim few deductions: its wider slabs and larger rebate beat the old regime for most salaried people with modest 80C and insurance claims. The old regime can still win for deduction-heavy taxpayers — someone paying high home-loan interest under section 24(b), large 80C contributions, HRA, and 80D premiums may shelter enough income to come out ahead.
The only reliable answer uses your own figures. Enter your salary and deductions below to see the tax under each regime side by side.
How to opt for the old regime
Opting out depends on the kind of income you have. Salaried taxpayers and others with no business or professional income face no form and no lock-in: you choose the old regime directly in the return, and you may switch back and forth every year as your circumstances change.
Taxpayers with business or professional income are bound more tightly. To leave the default new regime they must file Form 10-IEA before the due date for the return.
Common questions
Can I switch back to the old regime after using the new one?
If you are salaried with no business income, yes — you choose your regime afresh in the return every year, with no restriction on switching. If you have business or professional income, you can return to the old regime by filing Form 10-IEA, but once you go back to the new regime after opting out you cannot opt out again.
Do I have to file Form 10-IEA to use the old regime?
Only if you have business or professional income. Salaried taxpayers and others without business income simply select the old regime inside the ITR — no separate form is needed. Form 10-IEA is the statutory route for business-income taxpayers to opt out of the default new regime.
Is the ₹75,000 standard deduction automatic in the new regime?
Yes, for salaried taxpayers and pensioners. The ₹75,000 standard deduction under section 16(ia) is allowed in the new regime without any investment, declaration, or proof. It is what lets a salaried resident earning up to ₹12,75,000 reach nil tax once the section 87A rebate is applied.
Does the new regime apply to NRIs?
A non-resident is taxed under the new regime by default in the same way as a resident, and may opt for the old regime on the same basis. The key difference is the section 87A rebate: it is available only to residents, so a non-resident cannot rely on the rebate to reach nil tax up to ₹12,00,000.
Which law governs my FY 2025-26 return — the 1961 Act or the 2025 Act?
The Income-tax Act, 1961. The new Income-tax Act, 2025 applies from FY 2026-27 onwards, so the return you file for FY 2025-26 (assessment year 2026-27) is computed entirely under the 1961 Act and the rates set by the Finance Act 2025.
Where to go next
The regime choice is one decision inside the wider return. Once you have settled it, the remaining work — collecting Form 16, reconciling the Annual Information Statement, and computing income across every head — runs the same way under either regime.