India’s income tax landscape is quietly shifting again from April 1. With the rollout of the new Income-tax Rules, 2026 around perquisite valuation and the continued push towards the simplified tax regime, salaried taxpayers are once again facing the same big question — old vs new: which one actually saves more tax now?
The answer, as experts underline, is no longer straightforward. In fact, the gap between the two regimes is narrowing in some areas while widening in others.
Perquisite rules: More clarity, less loopholes — but not all bad news
One of the biggest changes comes from how perks (perquisites) like company cars, meals, gifts, fuel, and driver expenses are valued.
According to Sudhir Kaushik, Co-founder & CEO, Taxspanner (a Zaggle company), the new rules don’t necessarily reduce flexibility, as many feared. Instead, they bring more structure and clarity.
“The rules bring clarity, higher threshold limits of meal, gift, fuel, driver making perquisites more beneficial in terms of tax saving actual rupees. This revives structured compensation.”
In simple terms, companies can still design salary packages smartly — and employees can still benefit — especially under the old regime where such components matter more.
However, there’s a flip side.
Harsh Bhuta, Managing Partner, Bhuta Shah & Co. LLP, points out that some aggressive tax planning routes are now tighter.
“The new perquisite valuation rules narrow the scope for aggressive salary structuring, especially where employer-provided cars are a major component of compensation.”
This means if your salary heavily relies on perks like company cars, the tax advantage may not be as high as before.
Old vs New: The balance is shifting
The old tax regime traditionally rewarded those who invested, claimed deductions, and structured their salary smartly. The new regime, on the other hand, offers lower tax rates with minimal paperwork.
But with recent tweaks — especially the higher rebate up to Rs 12 lakh income and standard deduction in the new regime — things are changing.
Kaushik explains that the old regime is still far from irrelevant: “The old regime gains relevance, especially for taxpayers earning above Rs 12 lakh who can optimise deductions and perquisites.”
At the same time, Bhuta highlights a key shift: “Middle-income earners with minimal deductions can still choose the new tax regime owing to higher rebate and standard deduction.”
HRA, allowances, deductions: The deciding factors
If your salary includes HRA, rent payments, children education allowance, or deductions under Chapter VIII (like 80C, 80D, NPS, home loan) — the old regime still has a strong edge.
Bhuta explains: “If a salaried taxpayer has huge claim of HRA exemption… and eligible deductions… then he can opt for old regime despite higher tax slabs and taxable perquisite.”
He also notes that HRA has become particularly valuable in cities like Bengaluru, Hyderabad, Pune, and Ahmedabad — but only under the old regime.
On the other hand, if you live in a self-owned house, don’t invest much in tax-saving instruments, and prefer simplicity over optimization… then the new regime may still work better.
So, which regime should you pick?
Here’s where both experts converge — there is no universal winner.
Kaushik puts it simply: “There is no one-size-fits-all answer. The choice depends on income, investments, expenses, salary structure and financial discipline.”
And that’s really the crux of the story.
The real takeaway: Convenience vs optimisation
The new tax regime is clearly designed for ease — fewer deductions, lower rates, and minimal compliance. But that convenience can come at a cost.
As Kaushik cautions: “Many taxpayers choose convenience but may miss necessary tax savings.”
The old regime, though more complex, still rewards those who plan:
-Invest in ELSS, PPF, NPS
-Pay rent and claim HRA
-Structure salary with allowances and perks
Summing up…
The new rules haven’t killed the old regime — but they have made the decision more nuanced than ever.
High earners + structured salary + deductions → Old regime still powerful
Middle-income + fewer deductions + simplicity → New regime may win
What has truly changed is this: You can no longer assume — you have to calculate.
If you’re filing your ITR this year, a side-by-side comparison isn’t optional anymore — it’s essential.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws and regimes are subject to frequent changes by the government. Readers should verify details with official Income Tax Department notifications or consult a Chartered Accountant before making any financial decisions.