Is income up to ₹12 lakh really tax-free? New regime explained (FY 2025-26)
Under the new tax regime, the government's Budget 2025 announcement says there is no income tax on income up to ₹12 lakh. For salaried people the limit is ₹12.75 lakh, because of the ₹75,000 standard deduction.
New regime slabs (FY 2025-26)
| Income slab | Rate |
|---|---|
| 0 – ₹4 lakh | Nil |
| ₹4 – 8 lakh | 5% |
| ₹8 – 12 lakh | 10% |
| ₹12 – 16 lakh | 15% |
| ₹16 – 20 lakh | 20% |
| ₹20 – 24 lakh | 25% |
| Above ₹24 lakh | 30% |
Example: ₹15 lakh salary
Taxable income = ₹15,00,000 − ₹75,000 = ₹14,25,000. Slab tax = ₹20,000 + ₹40,000 + ₹33,750 = ₹93,750. Add 4% cess = ₹97,500.
The zero-tax benefit works through a rebate, so it applies to taxable income, not gross salary. Surcharge, capital gains and special rate income are not covered here.
Compare the new and old regime for your own numbers with the calculator below.
Try the India Income Tax Calculator (New vs Old Regime)Enter your own numbers and see the result instantly.