Old or new tax regime: which should I pick on a founder's salary?
For most founders on a modest salary the default new regime wins, but check it once a year rather than assuming. In the new regime income up to ₹4 lakh is untaxed, the slabs then rise in ₹4 lakh steps from 5% to 30% above ₹24 lakh, and a rebate makes income up to ₹12 lakh tax free, or ₹12.75 lakh of salary after the ₹75,000 standard deduction. The old regime has higher rates but keeps the deductions: the ₹1.5 lakh under what used to be section 80C, health insurance premiums, HRA, and interest on a home loan for a house you live in. It wins only when those deductions are large, typically when you pay high rent or a home loan and already fill your tax-saving investments. Employer NPS contributions count in both. A purely salaried founder can choose each year when filing, while someone with business income has fewer chances to switch, so run both numbers with your CA before you pick.
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A calculator that works out your tax under both regimes from your salary and deductions, with the slabs and the deductions each regime allows.
