Old vs New Tax Regime: Worked Examples at ₹15L, ₹25L, and ₹40L CTC

"Which tax regime should I pick?" doesn't have one answer — it depends on how much you earn and how much you can claim in deductions. Here's the same person's numbers run at three different income levels, so you can see exactly how the answer shifts.

The setup

Same profile at every income level: Basic is 40% of CTC, HRA claim assumes rent equal to 60% of Basic, and the Old Regime side includes the standard Employee PF (Section 80C) deduction. Only the CTC number changes.

What's happening here

At ₹15L, the deductions the Old Regime allows (HRA, 80C) are large relative to income, so they meaningfully shrink the taxable amount — often enough to beat the New Regime's lower rates. As CTC climbs toward ₹40L, those same deductions stay roughly the same rupee amount but shrink as a share of a much bigger income, while the New Regime's lower rates keep applying to every rupee. That's the mechanism behind the crossover — it's not that one regime is simply "better," it's that the deductions' weight relative to income changes.

Why your own numbers might differ

This assumes one specific HRA claim and no extra 80C investments beyond PF. A bigger 80C claim (ELSS, life insurance, home loan principal), a larger HRA claim, or NPS contributions under Section 80CCD(1B) all pull the crossover point in the Old Regime's favor — real answers only come from your own numbers.