The assumptions, stated up front
Every figure below uses the same inputs: annual CTC as stated, employer provident fund of ₹21,600 removed before salary is computed, employee provident fund of ₹21,600, professional tax of ₹2,400, no bonus, and — for the old regime only — ₹1,50,000 of claimed deductions. The new regime gets its ₹75,000 standard deduction, the old regime its ₹50,000.
That ₹1,50,000 deduction assumption is deliberately conservative, and we return to it below, because the entire old-versus-new argument turns on it. Full rule-by-rule sourcing is on our methodology page.
Finding 1: 12 LPA pays no income tax at all
At ₹12,00,000 CTC the standard deduction brings taxable income to ₹11,03,400 — under the ₹12,00,000 ceiling for the section 87A rebate. Slab tax works out to ₹50,340, the rebate cancels every rupee of it, and the estimated new-regime liability is zero.
The same salary under the old regime, with ₹1,50,000 of deductions claimed, costs ₹1,12,008. That is the widest proportional gap between the two regimes anywhere in the range: the difference between paying nothing and paying more than nine percent of CTC.
The edge matters more than the rate here. Marginal relief means crossing ₹12,00,000 of taxable income never costs more extra tax than the amount by which you crossed it, so it is not a cliff — but the zero-tax position ends there.
Finding 2: the new regime's advantage stops growing at ₹25 lakh
We expected the gap between the regimes to widen with income. It does — until 25 LPA, and then it stops dead. At 25, 30, 40 and 50 LPA the difference is ₹2,02,051 every time.
The reason is structural. Once taxable income clears the top threshold under both regimes, every additional rupee is taxed at 30% in each, so the difference between them can no longer grow. What changes above 25 LPA is not the size of the advantage but its significance: ₹2,02,051 is 8.1% of a ₹25 lakh package and 4.0% of a ₹50 lakh one.
- 25 LPA — new regime ₹3,13,061, old regime ₹5,15,112, gap ₹2,02,051 (8.1% of CTC)
- 30 LPA — new regime ₹4,69,061, old regime ₹6,71,112, gap ₹2,02,051 (6.7% of CTC)
- 40 LPA — new regime ₹7,81,061, old regime ₹9,83,112, gap ₹2,02,051 (5.1% of CTC)
- 50 LPA — new regime ₹10,93,061, old regime ₹12,95,112, gap ₹2,02,051 (4.0% of CTC)
Finding 3: surcharge applies nowhere below ₹50 lakh CTC
Surcharge is widely assumed to bite somewhere in the 30-to-50 lakh range. It does not. It is assessed on taxable income, not CTC, and the first band starts above ₹50,00,000.
A ₹50 lakh CTC produces ₹49,03,400 of taxable income under these assumptions — ₹96,600 short of the threshold. A ₹40 lakh CTC is ₹10,96,600 short. Across all eight bands the modelled surcharge is zero.
That ₹96,600 of headroom at 50 LPA is the single most consequential number in this analysis. Crossing ₹50,00,000 of taxable income applies a 10% surcharge to the tax amount itself, not merely to the income above the line. Marginal relief caps the damage, but how a bonus is timed across two financial years can decide which side of that threshold you land on.
The regime break-even, band by band
The more useful question is not which regime wins on our assumptions, but how much you would have to deduct for the answer to flip. We solved for that at each band.
The pattern is counterintuitive: the break-even is lowest at 15 LPA and rises with income before flattening. Moving into a higher slab makes the old regime harder to justify, not easier — the opposite of what most people assume when their tax bill grows.
- 12 LPA — ₹6,27,000 (about 53% of gross; the old regime can only draw level, never win)
- 15 LPA — ₹5,37,000 (about 36% of gross — the lowest bar in the range)
- 18 LPA — ₹6,33,000 (about 36% of gross)
- 20 LPA — ₹7,00,000 (about 35% of gross)
- 25 LPA and above — ₹7,98,000, and it does not rise again
Why ₹7,98,000 is harder than it looks
As a share of income the plateau looks increasingly reachable — 32% of gross at 25 LPA, but only 16% at 50 LPA. The problem is that the components are individually capped and those caps do not scale with your salary.
Section 80C stops at ₹1,50,000. Home-loan interest on a self-occupied property stops at ₹2,00,000. Section 80D is a few tens of thousands for most people under 60. Together those reach roughly ₹3,75,000 at best, which leaves more than four lakh to be found from HRA alone.
That makes HRA the deciding component at every band. If you rent in a metro on a salary structured with a genuine HRA line and carry a home loan at the same time, the old regime deserves a real calculation. Short of that combination, it does not.
Effective rates across the range
One last figure worth internalising: the gap between your effective rate and your marginal rate. The effective rate is what you actually pay across the whole salary; the marginal rate is what the next rupee costs. Decisions about raises, bonuses, and deductions should use the second number, not the first.
- 12 LPA — 0% effective (fully rebated)
- 15 LPA — 6.4% effective, 15% marginal band
- 18 LPA — 8.2% effective, 20% marginal band
- 20 LPA — 9.5% effective, 20% marginal band
- 25 LPA — 12.6% effective, 30% marginal band
- 30 LPA — 15.7% effective, 30% marginal band
- 40 LPA — 19.6% effective, 30% marginal band
- 50 LPA — 22.0% effective, 30% marginal band
What this means in practice
For most salaried people in this range the new regime wins, and it wins without requiring any planning. The old regime is a live question only at 15 to 20 LPA, and only with an unusually complete deduction stack.
Above 25 LPA the regime decision is effectively settled, and the remaining levers are different: employer NPS contributions under section 80CCD(2), which survive inside the new regime and reduce tax at the 30% marginal rate, and the timing of bonus and variable pay relative to the ₹50,00,000 surcharge threshold.