From FY 2023-24 the new tax regime became the default for most taxpayers, and successive budgets have kept sweetening it. For FY 2026-27 the question is no longer "should I switch?" but "does the old regime still earn its keep for me?"
What the new regime gives you
Lower slab rates, a higher standard deduction, and almost no paperwork. In exchange you give up most exemptions and deductions — HRA, LTA, 80C, 80D, and home-loan interest on self-occupied property being the big ones.
Who still benefits from the old regime
- Salaried professionals paying significant rent in a metro (large HRA claims).
- Home-loan borrowers with substantial interest under Section 24(b).
- Families with high 80C + 80D usage — EPF, PPF, ELSS, school fees, parents' health cover.
- Anyone whose combined deductions exceed the break-even for their income level.
The only reliable way to decide
Run the computation both ways on your actual numbers every April — not on a rule of thumb. Employers ask for your regime choice early in the year because it drives monthly TDS; choosing casually can lock up cash flow for months.
Note: Salaried taxpayers can switch regimes every year at the time of filing. Business-income holders effectively get one switch — take that decision with advice.