New tax regime: Taxpayers will not have to pay any tax on salary of Rs 19,00,000, check experts’ calculations
New Tax Regime Calculations: New tax regime revised slabs are applicable for the income earned during the financial year 2025-26. In the new tax regime, an income up to Rs 12.75 lakh is tax-free for salaried-class individuals, but what if their income is more? What if a taxpayer is earning Rs 19,00,000? Is there a way to pay zero tax on it? See expert calculations to know!
New Tax Regime Calculations: Saving tax to the maximum level is the aim of any taxpayer. The new tax regime gives them an opportunity to pay 0 tax on an income up to Rs 12,00,000. If they are salaried-class individuals, the tax-free limit is Rs 12,75,000. If the income is slightly higher, they also get marginal relief which lightens their tax liability. But the problem arises when the salary rises. If it is in the Rs 15 lakh-20 lakh range, a taxpayer may need to pay quite a substantial amount as tax. But is there a way to reduce tax to zero in such cases? If someone is earning Rs 19,00,000, can they pay zero tax on it? It’s not easy, but it’s not impossible! Through expert calculations, know what its possibility is and how it can be done?
Income tax limit in new tax regime
In the new tax regime, the taxpayer doesn’t have to pay any tax on an income up to Rs 12,00,000. For a salaried-class individual, the same limit is Rs 12,75,000.
Tax rebate in new tax regime
The maximum tax rebate in the new tax regime is Rs 60,000 under Section 87A, which makes tax liability 0 on an income of Rs 12,00,000.
Deductions available in new tax regime
A Rs 75,000 standard deduction is available to salaried-class individuals. It makes tax liability 0 at a Rs 12,75,000 salary.
Employer contribution to employee’s NPS account
A taxpayer can get the tax advantage of up to 14 per cent of their basic pay and DA on the employer’s contribution to their National Pension System (NPS) account under Section 80 CCD(2).
Employer contribution to employee’s EPF account
A taxpayer can get the tax benefit of up to 12 per cent of their basic pay and DA on the employer’s contribution to their Employees’ Provident Fund (EPF) account.
The same benefit may not be available to private sector employees if the employer is not contributing to their EPF account.
Tax benefit on post office scheme interest
A taxpayer can get a tax benefit of up to Rs 3,500 on the interest earned from a post office scheme under Section 10(15i).
PPF, Sukanya Samriddhi Account tax benefit
The new tax regime also provides a tax benefit on the interest earned on PPF and Sukanya Samriddhi Yojana. The exemption is unlimited.
Contribution to Agni Path Scheme
Contribution to the central government’s Agni Path Scheme is 100 per cent exempted under Section 80CCH(2).
Tax benefits on family pension
In case of a family pension, an income of Rs 25,000 or 1/3rd, whichever is lower, is exempt.
Travel/daily/conveyance allowance
Apart from that, one can get included such as travel, daily, entertainment, and daily allowances to their salary. They may submit original bills for these services to get the tax benefit.
Calculations to make your Rs 19 lakh salary tax-free
| Particulars |
Tax Rate (%) |
Income (Rs) |
Tax amount (Rs) |
| Net Income |
|
19,00,000 |
|
| Less: Standard Deduction |
|
75,000 |
|
| Deduction U/s 80 CCD (2) |
|
1,26,000 |
|
| Post Office Scheme Interest 10(15(i) |
|
3,500 |
|
| Interest on PPF/ Sukanya Yojna(1.5 lakhs +1 Lakhs) |
|
17,500 |
|
| Net taxable income |
|
16,78,000 |
|
| Income exempt up to Rs 4 lakh |
Nil |
4,00,000 |
|
| Income tax slab of Rs 4 lakh and up to Rs 8 lakh |
5 |
4,00,000 |
20,000 |
| Income tax slab of Rs 8 lakh up to Rs 12 lakh |
10 |
4,00,000 |
40,000 |
| Income tax slab of Rs 12 lakh up to Rs 16 lakh |
15 |
4,78,000 |
71,700 |
| Total income tax liability |
|
– |
1,31,700 |
| Cess at 4% on total income tax payable |
|
– |
5,268 |
| Final income tax liability (inclusive of cess) |
|
– |
1,36,968 |
What you need to do then
This tax amount of Rs.1,36,968 may be reduced to zero by making following deductions:
Contribution to Agni path Scheme u/s 80CCH(2) is 100 per cent exempted.
Travel allowance on actual basis, for travelling purpose, in case of transfer or office shifting.
Daily allowance on actual basis, but it will form part of CTC.
Conveyance allowance on actual basis, but it will form part of CTC.
Other deductions available in new tax regime for FY 2025-26
- In case of Family pension income Rs 25,000/ or 1/3rd, whichever is lower is exempt.
- Rent income from let out property will be exempt up to 30 per cent.
- Exemption for the 2nd vacant house will be there without considering deemed rent income.
- Gratuity Amount u/s 10 (10) up to Rs 25 lakhs is exempt.
- Leave encashment allowance u/s 10(10 AA) up to Rs 25 lakh is exempt.
- Voluntary retirement amount is exempt u/s 10 (10C) up to Rs 5 lakh.
- Income from life insurance policy u/s 10 (10D) is exempt.
- No taxable perquites received from office like office laptop, medical policy and Interest-free loan are exempt forming part of salary.
- Transport allowance for special-abled person will be exempt.
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