Old vs New Tax Regime for 20 LPA Salary
For 20 LPA salary, compare estimated annual tax under old and new regimes and see which choice leaves more take-home pay.
Short answer
New regime looks better for 20 LPA.
Estimated annual savings compared to the other regime are ₹1,71,205. Old regime tax is ₹3,59,112, while new regime tax is ₹1,87,907.
ESTIMATED MONTHLY TAKE-HOME
₹1,47,208
Where your salary goes
iMonthly
Take-Home
₹1,47,208
Best choice: New Regime
Save ₹1,71,205/year compared to the other regime.
Old vs new regime
Same salary inputs, compared under both FY 2025-26 regimes.
Break-even deduction insight
Old regime beats new regime only if deductions exceed ₹7,00,000. You entered ₹1,50,000.
Where ₹7,00,000 of deductions has to come from
Break-even deduction estimate: ₹7,00,000.
The statutory caps do most of the work against you. 80C stops at ₹1,50,000, home-loan interest at ₹2,00,000 for a self-occupied property, and 80D at ₹25,000 for most under-60 taxpayers. That is ₹3,75,000 with all three fully used.
The remaining ₹3,25,000 has to come almost entirely from HRA, which means metro rent and a salary structured with a large HRA component. Without a home loan running at the same time, ₹7,00,000 is out of reach for most people at this income.
The old regime needs ₹7 lakh of deductions at 20 LPA
At 20 LPA the break-even deduction climbs to ₹7,00,000, ₹1,63,000 higher than the same figure at 15 LPA. Moving up the slab structure made the old regime harder to justify rather than easier — the opposite of the intuition most people bring to the decision.
New-regime tax is ₹1,87,907 against ₹3,59,112 under the old regime on the default ₹1,50,000 deduction assumption, a difference of ₹1,71,205. That is about 8.6% of CTC, the largest share the regime gap reaches at any band.
Taxable income here is ₹19,03,400, which leaves ₹96,600 of headroom before the new regime's 25% band starts at ₹20,00,000. Worth knowing before a raise, since income above that line is taxed at 25% plus cess instead of 20.8%.
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FAQ
Is old regime better for 20 LPA?
In this estimate, the new regime is better. Old regime can become better if your eligible deductions and exemptions are high enough.
How much deduction is needed for old regime to win?
With these assumptions, old regime starts to look competitive around ₹7,00,000. Your actual HRA, home loan interest, insurance, and investment deductions can change this.
Is the old regime ever better at 20 LPA?
Only with roughly ₹7,00,000 of genuine deductions — in practice a home loan near the interest cap, 80C fully used, meaningful HRA on metro rent, and health insurance, all in the same year. Below that total, the new regime saves ₹1,71,205 on these assumptions.
Why does the break-even rise from 15 LPA to 20 LPA?
The new regime's slab structure widens its advantage as income rises, so the deduction total needed to offset it grows too — from ₹5,37,000 at 15 LPA to ₹7,00,000 here. It plateaus at ₹7,98,000 from 25 LPA upward.
How much of 20 LPA is taxed at 25%?
None, on these assumptions. Taxable income is ₹19,03,400 and the 25% band starts at ₹20,00,000, so the salary stops ₹96,600 short of that slab.