Starting April 1, 2025, India's new income tax regime will be implemented, offering zero tax on income up to ₹12 lakh. Additionally, taxpayers can claim a ₹75,000 standard deduction, effectively making incomes up to ₹12.75 lakh tax-free. Let’s understand how the new tax calculations work and how deductions like NPS contributions help in reducing tax liability.
| Income Range (₹) | Tax Rate |
|---|---|
| 0 – 4,00,000 | 0% |
| 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% |
| 24,00,001 और अधिक | 30% |
Let’s assume a person earns ₹20 lakh annually, including salary, savings account interest, and dividends. After applying eligible deductions, the net taxable income will be lower.
| Details | Amount (₹) |
|---|---|
| Gross Taxable Income | 20,00,000 |
| (-) Standard Deduction | 75,000 |
| (-) Employer's NPS Contribution | 1,50,000 |
| Net Taxable Income | 17,75,000 |
Now, let’s calculate tax on ₹17.75 lakh based on the new tax slabs:
| Income Slab (₹) | Tax Rate | Taxable Income (₹) | Tax Amount (₹) | Balance Income (₹) |
|---|---|---|---|---|
| 0 – 4,00,000 | 0% | 4,00,000 | 0 | 13,75,000 |
| 4,00,001 – 8,00,000 | 5% | 4,00,000 | 20,000 | 9,75,000 |
| 8,00,001 – 12,00,000 | 10% | 4,00,000 | 40,000 | 5,75,000 |
| 12,00,001 – 16,00,000 | 15% | 4,00,000 | 60,000 | 1,75,000 |
| 16,00,001 – 20,00,000 | 20% | 1,75,000 | 35,000 | 0 |
Total Tax Payable = ₹1,55,000
4% Cess (₹1,55,000 × 4%) = ₹6,200
Final Tax Payment = ₹1,61,200
✔ No tax up to ₹12.75 lakh (with standard deduction).
✔ Lower tax rates compared to the old regime.
✔ NPS contributions help reduce taxable income further.
✔ Simplified tax structure with fewer exemptions required.
Would you like a customized tax estimate based on your income? Let me know your income details and I can calculate it for you! 😊
