Which tax regime is better for salaried employees in 2026?

It depends on your deductions. If you have investments (80C, 80D, home loan, etc.) exceeding ₹3.75 Lakh, the old regime usually saves more tax. Otherwise, the new regime with lower rates may be better.

Can I switch between old and new tax regime every year?

For salaried individuals, yes, you can choose every year. For business income, once you opt out of the new regime, you cannot switch back unless certain conditions apply.

What deductions are allowed in the new tax regime?

Only employer's contribution to NPS (80CCD(2)) and 80CCH (Agri-Infra) are allowed. No other deductions (80C, 80D, 80G, 24(b), etc.) are available.

How do I opt for the old tax regime?

If you have salaried income, you can simply choose the old regime while filing ITR. For business income, you need to file Form 10-IEA before the due date.

Is the new tax regime beneficial for high-income earners?

Not always. High-income earners with large deductions (home loan, investments, etc.) may save more under the old regime. It's best to compare both.

Income Tax

Old vs New Tax Regime 2026: Which Saves More Tax & Refund?

Compare old vs new tax regime 2026. Learn which regime gives more tax savings, higher refund, and how to choose wisely. Expert guide by Liquetax.

What this guide covers

What does Old vs New Tax Regime : Which Saves More Tax & Refund? mean in practice?
Who is affected and what should they check first?
Which documents or records should be kept ready?
What common mistakes should be avoided?