Income Tax: Some provisions have been made by the Income Tax Department regarding income tax exemption in the new tax regime. Earlier, where income up to seven lakhs was tax-free, now it has been increased to Rs 12 lakh. But you can also save tax on income up to 19 lakhs in some ways.

Not only in the old tax regime, money be saved in the new one too.

Whenever the name of tax saving comes to save income tax, only the old tax regime comes to people's minds. In this, tax exemption can be taken by claiming HRA, LTA 80C, etc.

There will be benefits in the new tax regime.

The new tax regime is now being made more friendly by the government. In 2025-26, most of the taxpayers will come in the new tax regime, because the savings in it are so much.

This is the way to save tax on income of 19 lakhs.

You can take advantage of the changed slab rates, standard deduction, and salary structuring facility being provided by the companies to save your tax. If you do this, then you will not have to pay tax even on income up to 19,20,000.

This way your tax will become zero.

Changes have been made in the slabs of the new tax regime from the financial year 2025-26. Now the salary structure of companies is also being made tax-friendly. With this, even if your salary is Rs 19 lakh 20 thousand annually, then you will not have to pay any tax.

First, know what are the new slabs and taxes.

Slab Tax
0 – 4,00,000 Zero
4,00,001 – 8,00,000 5%
8,00,001 – 12,00,000 10%
12,00,001 – 16,00,000 15%
16,00,001 – 20,00,000 20%
20,00,001 – 24,00,000 25%
30% above 24,00,000

Discount is available on more than 25 thousand.

Keep in mind that on taxable income up to 12 lakhs, tax exemption of up to Rs 25,000 is available as per section 87A, that is, zero tax has to be paid.

For this, you will have to look at the breakup in your CTC. In your CTC, your basic salary is Rs 9,60,000 and your allowance is Rs 4,72,320.

In such a case, this will be the fixed component, which will be excluded from the flexi component. On the other hand, if we look at the PF of the employees, it will be 21,600 directly. The gratuity of the employee will be 46,080, while the variable pay of the employee will be Rs 96,000.

On the other hand, the MPMC component of books, cars, entertainment, etc. will be Rs 6,23,600. This total goes above 19 lakhs.

Now know the taxable income.

Out of 19 lakh 20 thousand, Rs 75,000 is exempted from standard deduction. Now, the remaining, 18,45,000, out of which NPS contribution is Rs 84,000, which will not be taxed. So now 17,61,000 is left. Flexi Pay tax-free components are Rs 6,23,600, while car conveyance is Rs 2,85,600.

Rs 1,08,000 is spent on books etc. Rs 2,40,000 on entertainment and Rs 90,000 on uniform, which is tax-free. Now you are left with Rs 11,37,400. Now comes the home loan interest and rental income set off, which will be Rs 2,60,000. Interest deduction will be Rs 2,00,000.

On the other hand, rental income will be adjusted to Rs 60,000. In this case, Rs 8,77,400 is left. Another deduction of Rs 50,000 is Rs 8,27,400 which will be the taxable amount. In such a situation, you can save a lot of money and get tax exemption by restructuring your salary.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.