The new tax regime offers lower slab rates but strips out most deductions and exemptions. The old regime keeps them at higher rates. Neither is universally better, and the answer changes as your circumstances do.

The break-even logic

The decision reduces to one question: do your deductions exceed the benefit of the lower rates? If you claim substantial amounts under Section 80C, pay a home loan, receive house rent allowance and carry a health insurance premium, the old regime often still wins. If your deductions are modest, the new regime usually leaves you better off with far less paperwork.

Run the numbers, do not follow the crowd

Advice that circulates in office groups is generally based on someone else's deduction profile. Two people on identical salaries can reach opposite conclusions. Compute both, using your actual figures for the year rather than what you intend to invest.

You can switch, within limits

Salaried individuals without business income may choose afresh each year. Those with business income get one opportunity to move back to the old regime, and after that the choice is locked. This asymmetry deserves thought before you opt out.

A note on timing

Make this decision at the start of the financial year, not at filing. Choosing the old regime in March after having made no eligible investments gives you the higher rates without the deductions that justify them.