Income Tax on Salary in India —
How Much & How to Calculate
Work out the tax on your salary for FY 2025-26 (AY 2026-27): new-regime slabs, the Rs75,000 standard deduction, the Section 87A rebate, HRA and other exemptions, Form 16 and TDS.
For FY 2025-26 (AY 2026-27) the new regime is the default. After the Rs75,000 standard deduction and the Section 87A rebate (which makes tax nil up to Rs12,00,000 of taxable income), a salaried employee pays zero income tax up to about Rs12.75 lakh of salary. Above that, slab rates from 5% to 30% apply, plus 4% cess. The old regime is optional and lets you claim 80C, 80D, HRA and home-loan deductions.
Income Tax Slabs on Salary — FY 2025-26
These are the new-regime slabs for AY 2026-27 (post Union Budget 2025). They apply automatically unless you opt for the old regime. See the full income tax slabs page for both regimes.
| Taxable Income (after standard deduction) | Rate | Tax on Slab |
|---|---|---|
| Up to Rs4,00,000 | Nil | Rs0 |
| Rs4,00,001 – Rs8,00,000 | 5% | Rs20,000 |
| Rs8,00,001 – Rs12,00,000 | 10% | Rs40,000 |
| Rs12,00,001 – Rs16,00,000 | 15% | Rs60,000 |
| Rs16,00,001 – Rs20,00,000 | 20% | Rs80,000 |
| Rs20,00,001 – Rs24,00,000 | 25% | Rs1,00,000 |
| Above Rs24,00,000 | 30% | — |
Plus 4% health & education cess. Section 87A rebate makes tax nil where taxable income is up to Rs12,00,000. Surcharge applies above Rs50 lakh (capped at 25% in the new regime). Verify on incometax.gov.in before filing.
The Section 87A rebate zeroes out tax up to Rs12,00,000 of taxable income. A salaried person also gets a Rs75,000 standard deduction, so a salary of Rs12,75,000 reduces to Rs12,00,000 taxable — still fully rebated. Every rupee above that is taxed at slab rates on the whole income (marginal relief smooths the jump just past Rs12L).
Want your exact salary tax computed both ways?
Use the Income Tax Calculator →Old Regime vs New Regime for Salary
The new regime is default from FY 2023-24 — lower slab rates but almost no deductions. The old regime has higher rates but lets you claim 80C, 80D, HRA and home-loan interest. Salaried employees can switch each year; opt for the old regime by filing Form 10-IEA before the ITR due date.
New regime — default, low rates
- Nil tax up to Rs12.75L salary (with SD + 87A)
- Rs75,000 standard deduction
- HRA/LTA and most 80-series deductions NOT allowed
- NPS employer contribution 80CCD(2) still allowed
- Best when you have few investments/loans
Old regime — optional, deduction-heavy
- 87A rebate only up to Rs5,00,000 income
- Rs50,000 standard deduction
- 80C Rs1.5L, 80D, HRA, home-loan interest Rs2L
- Senior 60-80 exempt Rs3L; super-senior 80+ Rs5L
- Best when total deductions exceed ~Rs3.75L
New regime suits you if
- You rent little / have no HRA to claim
- Your 80C, 80D and loan deductions are small
- You want a simpler, low-rate structure
- Your salary is up to ~Rs12.75L (likely zero tax)
Old regime may win if
- You claim full 80C (Rs1.5L) plus 80D
- You get large HRA and pay high rent
- You have home-loan interest up to Rs2L
- Your total deductions cross ~Rs3.75-4L
Because the new regime is default, you must actively opt out by filing Form 10-IEA before the ITR due date. If you do not, TDS and your assessment default to the new regime — even if the old regime would have saved you tax.
Not sure which regime is cheaper for you?
Old vs New Regime Calculator →Salary Exemptions & Deductions
What you can subtract from gross salary depends on the regime. HRA and the big 80-series deductions are only available in the old regime; the standard deduction and NPS employer contribution work in both.
| Component | New Regime | Old Regime | Limit |
|---|---|---|---|
| Standard deduction | Rs75,000 | Rs50,000 | Flat, for salary |
| HRA (Section 10(13A)) | No | Yes | Min of 3 conditions |
| LTA (Section 10(5)) | No | Yes | Actual, 2 in 4 yrs |
| Gratuity (Section 10(10)) | Up to Rs20L | Up to Rs20L | Lifetime limit |
| 80C (PPF, ELSS, LIC) | No | Rs1,50,000 | — |
| 80D (health insurance) | No | Rs25K / Rs50K | Self / senior |
| NPS employer (80CCD(2)) | Yes | Yes | Up to 14% / 10% of basic+DA |
| Home-loan interest (Sec 24) | No | Rs2,00,000 | Self-occupied |
In the new regime, most allowances beyond the standard deduction and employer NPS are not available. HRA computation: least of (i) actual HRA, (ii) rent paid minus 10% of salary, (iii) 50% (metro) / 40% (non-metro) of salary.
How Salary Tax Adds Up — Rs14L CTC
New regime · salary Rs14,00,000
New regime · salary Rs12,75,000
Above the Rs12L rebate ceiling, tax is charged on the whole taxable income at slab rates (not only the excess). The illustration above uses the new-regime slabs; run your own numbers in the income tax calculator.
Get your salary tax and regime choice done for you.
File My Salary ITR →Form 16, TDS on Salary & Filing
Your employer deducts TDS under Section 192 every month on estimated annual salary and issues Form 16 by 15 June after the year ends. Declare your investments and HRA to the employer via Form 12BB so TDS is deducted correctly.
- PAN linked with Aadhaar
- Form 16 from every employer
- Cross-check TDS with Form 26AS & AIS
- Choose regime (Form 10-IEA if old)
- Report HRA / exemptions correctly
- Claim NPS 80CCD(2) if offered
- Declare other income (FD interest etc.)
- File ITR-1 (Sahaj) or ITR-2
- Pay any self-assessment tax
- E-verify within 30 days
If you switched employers, tell the new one your previous salary and TDS. Otherwise each employer applies the basic exemption and slabs separately, under-deducting tax — leaving a shortfall plus interest under Sections 234B/234C to pay at filing.
Most salaried taxpayers file ITR-1 (Sahaj); those with capital gains or more than one house property use ITR-2. Verify TDS in Form 26AS and the AIS before submitting.
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