Tax Planning
Tax Savings Optimizer
Compare Old vs New Tax Regime and find unclaimed deductions. FY 2025-26 rates.
Income Details
Existing Deductions
Old Regime
New Regime (FY 2025-26)
Optimization Opportunities (Old Regime)
| Section | Current | Max Limit | Gap | Action |
|---|
What is the Tax Savings Optimizer?
The Tax Savings Optimizer is a free income tax calculator that compares your tax liability under both the Old and New tax regimes for FY 2025-26 (AY 2026-27) and tells you which one saves you more money. It also identifies unclaimed deduction gaps under Sections 80C, 80D, 80CCD(1B), and 24(b) — so you know exactly how much more tax you can save by investing in PPF, NPS, ELSS, health insurance, or claiming HRA.
Most tax calculators online show you a number. This optimizer shows you the gap — the difference between what you're currently claiming and the maximum allowed under each section. That gap is your untapped tax saving opportunity for this financial year.
Whether you're a salaried employee trying to decide between old and new regime before submitting your investment declaration, or a freelancer planning deductions before March 31 — this tool gives you a clear, side-by-side comparison in under 60 seconds.
How to Use This Tax Savings Calculator
-
1
Enter your annual income (CTC)
Enter your gross annual CTC or taxable income. Set your basic salary percentage (usually 40–50% of CTC) and select your city type for HRA calculation.
-
2
Add your deductions
Fill in your actual investments and expenses — EPF contribution, 80C investments (PPF, ELSS, LIC), health insurance premiums (80D), NPS contributions under 80CCD(1B), home loan interest under Section 24(b), and monthly rent for HRA.
-
3
Compare Old vs New regime side-by-side
The calculator instantly shows your tax under both regimes with a clear "you save ₹X more" verdict. The regime with lower tax is highlighted as the winner.
-
4
Review your deduction gap table
The optimization table shows how much headroom you have under each section — e.g. if you've invested ₹80,000 in 80C but the limit is ₹1.5 lakh, your gap is ₹70,000. Fill that gap before March 31 to reduce your tax further.
Old vs New Tax Regime — Key Differences FY 2025-26
Old Regime — More Deductions
Allows HRA exemption, Section 80C (₹1.5L), 80D (₹25K–₹1L), NPS 80CCD(1B) (₹50K), and home loan interest under 24(b) (₹2L). Higher slab rates but significant deductions can make it cheaper for many salaried employees.
New Regime — Lower Rates, Fewer Deductions
Lower tax slab rates across all brackets. Standard deduction of ₹75,000. Income up to ₹12,75,000 is effectively tax-free (Section 87A rebate). But no 80C, 80D, HRA, or home loan deductions allowed.
Breakeven Point
For incomes between ₹10–15 lakh, the old regime typically wins if your total deductions exceed ₹3.75 lakh. Below that threshold, the new regime's lower slab rates usually result in less tax. Use the calculator above to check your exact breakeven.
Can You Switch Every Year?
Yes — salaried employees can switch between old and new regime every financial year when submitting their investment declaration. Self-employed individuals can switch only once (from new back to old). There's no lock-in.
Section 80C Tax Saving Options (up to ₹1.5 Lakh)
Section 80C is the most popular tax-saving section, with a combined limit of ₹1,50,000 per financial year. Here are the most common investment options that qualify:
- ELSS Mutual Funds — Equity-linked savings scheme with a 3-year lock-in. Historically the highest-returning 80C option (10–14% CAGR). Invest via SIP for rupee cost averaging.
- PPF (Public Provident Fund) — 15-year lock-in, currently 7.1% interest, fully tax-free (EEE status). Safe and government-backed.
- EPF (Employee Provident Fund) — Your employer's EPF contribution counts toward 80C. Most salaried employees already exhaust a significant portion of 80C through EPF alone.
- NPS Tier 1 — Qualifies under 80C (up to ₹1.5L) plus an additional ₹50,000 under Section 80CCD(1B). Total NPS tax benefit: up to ₹2 lakh.
- Tax-Saver FD — 5-year fixed deposit with a bank. Lower returns than ELSS but zero market risk. Interest is taxable.
- Life Insurance Premium, ULIP, SSY, NSC — Also qualify but have specific conditions and lock-in periods.
Optimise your taxes as part of your financial plan
Save your calculation, set a target, and get a personalised plan — all free.
Add to My Financial Plan — FreeRelated Articles
Deep-dive guides to help you make better financial decisions.
New vs Old Tax Regime: Which Saves More (FY 2025-26)
The government made the new tax regime the default in 2023. With revised slabs, a higher rebate limit, and no deduction…
Read article →ELSS vs PPF: Best Tax-Saving Investment Under 80C (2025)
Both ELSS and PPF save tax under Section 80C — but they work very differently. Here is a head-to-head comparison to hel…
Read article →HRA Exemption on Rent Paid to Parents: Save Tax Legally
If you live with your parents and pay them rent, you can legally claim HRA exemption — saving up to ₹1–2 lakh in taxes …
Read article →FAQs