1Can I save tax in the new tax regime?
Yes — through the Rs 75,000 standard deduction, the 87A rebate up to Rs 12,00,000, employer NPS under 80CCD(2), and exempt reimbursements. Most other deductions, though, need the old regime.
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ArticleThe new regime is now the default, and many people assume it leaves no room to save tax. That's not quite true — a few levers still work. Here's how to reduce tax within the new regime.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-13
Quick answer
The new regime drops most deductions, but the standard deduction, 87A rebate, employer NPS and smart structuring still cut your tax. Here's how.
The new regime gives salaried taxpayers a Rs 75,000 standard deduction — higher than the old regime's Rs 50,000 — and it's automatic, with nothing to invest or prove. It's the simplest saving and applies to every salaried person in the new regime.
Tax is nil up to Rs 12,00,000 of total income under the new regime (about Rs 12,75,000 of salary once the standard deduction is applied). If you're near that line, keeping your taxable income within it — by timing income or routing part through exempt or employer-NPS components — can keep your tax at zero.
This is the big one: the employer's NPS contribution is deductible even in the new regime, up to 10% of salary (14% for government employees). Asking your employer to route part of your package through NPS is one of the few genuine deductions that survives, and it builds retirement savings too.
Certain components — like reimbursements against actual bills and specific exempt allowances — can still reduce taxable salary in the new regime. Structuring your package to use the components that remain exempt keeps more of your pay out of the tax net.
The best new-regime decision is sometimes to not be in it. If you have large HRA, a home loan, or heavy 80C/80D usage, the old regime may still beat the new — so run both each year rather than defaulting to the new regime.
Yes — through the Rs 75,000 standard deduction, the 87A rebate up to Rs 12,00,000, employer NPS under 80CCD(2), and exempt reimbursements. Most other deductions, though, need the old regime.
No — 80C, HRA, 80D and most deductions don't apply in the new regime. The main deduction that survives is the employer's NPS contribution under 80CCD(2).
Not always — it wins when you have few deductions. With large HRA, a home loan or heavy 80C/80D, the old regime can still be lower, so compare both each year.
Not sure the new regime is your best option? Write to the firm and we'll compare both on your numbers.