A ₹12 lakh salary does not by itself determine which tax regime produces lower tax. The result depends on the income included, deductions and exemptions that are actually eligible, and the law for the relevant period.
Period used by NiyamFin
The current calculator models FY 2025-26 / AY 2026-27. It uses that period's slabs, salaried standard deductions, Section 87A rules and 4% cess. Do not treat it as an evergreen filing engine.
What to compare
Enter gross taxable salary and only amounts that satisfy the applicable conditions. These may include a calculated HRA exemption, eligible Section 80C payments, Section 80D, Section 80CCD and applicable house-property interest. A statutory ceiling is not an automatic deduction.
Two employees can each earn ₹12 lakh and obtain different results. One may have no material old-regime exemptions; another may have an eligible HRA exemption and qualifying deductions. Run both calculations with complete inputs rather than applying a salary-based winner rule.
Do not buy an investment, insurance policy or loan merely to change the comparison. Product suitability and tax eligibility are separate questions.
Common mistakes
- Assuming either regime always wins at this salary.
- Treating rent paid as the HRA exemption.
- Confusing payroll TDS with final tax liability.
- Mixing figures from different financial and assessment years.
- Ignoring special-rate income or other facts omitted by a simple salary model.
Use the New vs Old Tax Regime Calculator with actual eligible figures, then verify current filing guidance.
Sources
- Income Tax Department: Salaried individuals, AY 2026-27
- Income Tax Department: New versus old tax regime FAQs
Educational information, not tax advice.