In the new tax regime for FY 2026-27, two things together wipe out tax on taxable income up to ₹12 lakh: the Section 87A rebate (up to ₹60,000) and the ₹75,000 standard deduction for salaried people. So gross salary up to ₹12.75 lakh pays zero tax.
What happens above ₹12.75 lakh?
If the rebate simply disappeared, earning ₹1 more would cost over ₹60,000 in tax. That is why there is marginal relief: tax on taxable income above ₹12 lakh cannot be more than that extra income.
| Gross salary (yearly) | Taxable income | Total tax (incl. 4% cess) |
|---|---|---|
| ₹12,75,000 | ₹12,00,000 | ₹0 |
| ₹13,00,000 | ₹12,25,000 | ₹26,000 |
| ₹13,50,000 | ₹12,75,000 | ₹74,100 |
| ₹15,00,000 | ₹14,25,000 | ₹97,500 |
| ₹18,00,000 | ₹17,25,000 | ₹1,50,800 |
| ₹20,00,000 | ₹19,25,000 | ₹1,92,400 |
| ₹25,00,000 | ₹24,25,000 | ₹3,19,800 |
New regime slabs
0% up to ₹4 lakh, 5% for ₹4-8 lakh, 10% for ₹8-12 lakh, 15% for ₹12-16 lakh, 20% for ₹16-20 lakh, 25% for ₹20-24 lakh and 30% above ₹24 lakh, plus 4% cess.
Remember the CTC vs salary difference
The table is on gross salary. If your CTC includes the employer's PF share, your gross salary is lower than your CTC, and so is the tax. See your exact figure in the salary calculator.
These figures are for income up to ₹50 lakh (surcharge applies above that). Rebate rules differ for income taxed at special rates, such as capital gains.
Change the amount, rate and tenure and see it instantly.
Frequently asked questions
Is ₹12 lakh tax-free in the old regime too?
No. In the old regime the rebate makes tax zero only up to ₹5 lakh of taxable income; there, deductions like 80C and HRA reduce the tax.
Should I file an ITR even if my tax is zero?
In many cases filing is required, and even when it is not, filing helps with refunds, loans and visas. Confirm with your CA.