• Table 1 – Individual Not Eligible for any Deduction 6
• Table 2 – Individuals Eligible for Deduction Under Section 123 6 of the 2025 Act (Section 80C of the 1961 Act)
• Table 3 – Assessee Eligible for Deduction Under Sections 123 7 and 126 of the 2025 Act (Sections 80C and 80D of the 1961 Act)
• Table 4 – Assessee Eligible for Deduction Under Sections 123 7 and 126, and Deduction for Interest on Housing Loan Under Section 22(1)(b) of the 2025 Act (Sections 80C, 80D and 24(b) of the 1961 Act)
Since the introduction of the alternative tax regime, the Government has consistently made changes to encourage taxpayers to move towards a simpler tax structure. As a result, many taxpayers have already shifted to the new regime, while many others continue to evaluate whether the switch is beneficial to them.
With the Union Budget 2026 now announced and both the old and the new tax regimes continuing to coexist, it becomes important to reassess this choice. The government has chosen to keep the tax slab rates unchanged, ensuring that the tax liability for individuals opting for the new regime remains the same as last year.
This article analyses the break-even point at which the tax liability under both regimes is the same, helping taxpayers decide which regime may be more suitable for them. The table below outlines the breakeven points for the new and old tax regimes based on the availability of different deductions:
Nature of Deductions Available in the Normal Tax Regime
allowable under Section 123 of the 2025 Act (Sec. 80C of the 1961 Act)
Deduction allowable under:
• Sections 123 of the 2025 Act (Sec. 80C of the 1961 Act)
• Section 126 of the 2025 Act (Sec. 80D of the 1961 Act)
Deduction allowable under:
• Sections 123 of the 2025 Act (Sec. 80C of the 1961 Act)
• Section 126 of the 2025 Act (Sec. 80D of the 1961 Act)
• Section 22 of the 2025 Act (Sec 24 of the 1961 Act) – for interest on housing loan
Breakeven Point When Is It Beneficial to Opt for the New Tax Regime Under Section 205 of the 2025 Act (Section 115BAC of the 1961 Act)?
Table 1 – Individual Not Eligible for any Deduction
Table 2 – Individuals Eligible for Deduction Under Section 123 of the 2025 Act (Section 80C of the 1961 Act)
Table 3 – Assessee Eligible for Deduction Under Sections 123 and 126 of the 2025 Act (Sections 80C and 80D of the 1961 Act)
Table 4 – Assessee Eligible for Deduction Under Sections 123 and 126, and Deduction for Interest on Housing Loan Under Section 22(1)(b) of the 2025 Act (Sections 80C, 80D and 24(b) of the 1961 Act)
A Glimpse of the People Behind Taxmann
Naveen Wadhwa Research and Advisory [Corporate and Personal Tax]
Chartered Accountant (All India 24th Rank)
14+ years of experience in Income tax and International Tax
Expertise across real estate, technology, publication, education, hospitality, and manufacturing sectors
Contributor to renowned media outlets on tax issues
Vinod K. Singhania
Expert on Panel | Research and Advisory (Direct Tax)
Over 35 years of experience in tax laws
PhD in Corporate Economics and Legislation
Author and resource person in 800+ seminars
V.S. Datey
Expert on Panel | Research and Advisory [Indirect Tax]
Holds 30+ years of experience
Engaged in consulting and training professionals on Indirect Taxation
A regular speaker at various industry forums, associations and industry workshops
Author of various books on Indirect Taxation used by professionals and Department officials
S.S. Gupta
Expert on Panel | Research and Advisory [Indirect Tax]
Chartered Accountant and Cost & Works Accountant
34+ Years of Experience in Indirect Taxation
Bestowed with numerous prestigious scholarships and prizes
Author of the book GST – How to Meet Your Obligations', which is widely referred to by Trade and Industry
Manoj Fogla
Expert on Panel | Research and Advisory [Charitable Trusts and NGOs]
Over three decades of practising experience on tax, legal and regulatory aspects of NPOs and Charitable Institutions
Law practitioner, a fellow member of the Institute of Chartered Accountants of India and also holds a Master's degree in Philosophy
PhD from Utkal University, Doctoral Research on Social Accountability Standards for NPOs
Author of several best-selling books for professionals, including the recent one titled 'Trust and NGO's Ready Reckoner' by Taxmann
Drafted publications for The Institute of Chartered Accountants of India, New Delhi, such as FAQs on GST for NPOs & FAQs on FCRA for NPOs.
Has been a faculty and resource person at various national and international forums
the UAE
Chartered Accountant (All India 36th Rank)
Has previously worked with the KPMG
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