If you earn Rs. 15 lakh a year, understanding the tax on a Rs. 15 lakh salary under the new tax regime is likely one of your biggest financial questions. The new tax regime has changed the way income is taxed, and knowing exactly how your salary is calculated can help you avoid costly surprises at the end of the financial year. In this guide, we break down the applicable slabs, the deductions you can still claim, and practical steps you can take to manage your tax liability.
Whether you are a salaried professional in Mumbai, Bengaluru, Pune, or anywhere else in India, this guide is written with your situation in mind. No jargon. No confusion. Just clear numbers and practical steps for FY 2025-26.
What Is the New Tax Regime?
The new tax regime was introduced in Budget 2020 and significantly revised in Budget 2023. From FY 2023-24 onwards, it became the default tax regime for individual taxpayers. Salaried individuals without business or professional income can still opt for the old regime, subject to the applicable rules.
The new regime offers lower tax rates but removes most deductions and exemptions. That means benefits such as Section 80C, HRA exemption, and most other Chapter VI-A deductions are generally not available. However, salaried taxpayers can claim a standard deduction of Rs. 75,000 under the new regime.
Why Does This Matter for a Rs. 15 Lakh Earner?
At Rs. 15 lakh, your income falls across several tax slabs, making it important to understand exactly how the new regime calculates your liability. The difference between choosing the regime that suits your circumstances and choosing it without comparison can run into thousands of rupees annually. Understanding the new regime is therefore an important part of financial planning.
New Tax Regime Slabs for FY 2025-26
The table below shows the new tax regime slabs applicable for FY 2025-26 (Assessment Year 2026-27):
| Income Slab (Rs.) | Tax Rate |
|---|---|
| Up to 4,00,000 | Nil |
| 4,00,001 to 8,00,000 | 5% |
| 8,00,001 to 12,00,000 | 10% |
| 12,00,001 to 16,00,000 | 15% |
| 16,00,001 to 20,00,000 | 20% |
| 20,00,001 to 24,00,000 | 25% |
| Above 24,00,000 | 30% |
In addition, a 4% Health and Education Cess applies to the tax payable. Surcharge may also apply at higher income levels, but it is generally not relevant for income of Rs. 15 lakh.
Exact Tax Calculation on Rs 15 Lakh Salary
Let us walk through the calculation step by step for a salaried individual with a gross salary of Rs. 15 lakh under the new regime in FY 2025-26.
Step 1: Subtract the Standard Deduction
Gross Salary: Rs. 15,00,000
Less Standard Deduction: Rs. 75,000
Taxable Income: Rs. 14,25,000
Step 2: Apply the Slab Rates
| Slab (Rs.) | Rate | Tax (Rs.) |
|---|---|---|
| 0 to 4,00,000 | Nil | 0 |
| 4,00,001 to 8,00,000 | 5% | 20,000 |
| 8,00,001 to 12,00,000 | 10% | 40,000 |
| 12,00,001 to 14,25,000 | 15% | 33,750 |
| Total Tax | 93,750 |
Step 3: Add Health and Education Cess
Cess at 4% on Rs. 93,750: Rs. 3,750
Total Tax Payable: Rs. 97,500
That works out to an average tax cost of approximately Rs. 8,125 per month, although actual monthly TDS may vary depending on your employer’s payroll calculation and other salary components.
Important: The Section 87A rebate does not apply here because the taxable income of Rs. 14.25 lakh exceeds the Rs. 12 lakh eligibility threshold.
What Deductions Are Still Allowed Under the New Regime?
One common misconception is that the new regime offers zero deductions. That is not entirely true. Certain deductions and exemptions are still available under the new regime, subject to the applicable conditions.
- Standard Deduction: Rs. 75,000 for salaried individuals and pensioners
- Employer NPS Contribution: Deduction under Section 80CCD(2) for the employer’s contribution to NPS, subject to the applicable percentage limits
- Agniveer Corpus Fund: Deduction under Section 80CCH for eligible contributions
- Gratuity and Leave Encashment: Applicable exemptions for eligible retirement benefits continue
- Transport Allowance for Eligible Disabled Employees: Exemption of up to Rs. 3,200 per month remains available for specified employees with disabilities
- VRS Compensation: Eligible compensation up to Rs. 5 lakh can qualify for exemption under Section 10(10C), subject to the applicable conditions
What You Generally Lose in the New Regime
- Section 80C deductions, including PPF, ELSS, life insurance premiums, and eligible tuition fees
- Section 80D deductions for health insurance premiums
- HRA exemption
- LTA exemption
- Section 24(b) interest deduction for a self-occupied house property
- Section 80TTA and 80TTB deductions for savings and certain deposit interest
- Professional tax deduction from salary
In other words, if you have a home loan, pay substantial rent, or make significant investments eligible for deductions under the old regime, it is worth comparing both regimes. The right choice depends on your specific income, deductions, and overall tax liability.
New Regime vs Old Regime for Rs 15 Lakh Salary
New Regime vs Old Regime for Rs 15 Lakh Salary
Many salaried professionals ask which regime saves more tax at Rs 15 lakh. The answer depends on the deductions you can claim under the old regime. However, the table below gives a practical comparison for a typical scenario.
| Particulars | New Regime (Rs) | Old Regime (Rs) |
|---|---|---|
| Gross Salary | 15,00,000 | 15,00,000 |
| Standard Deduction | 75,000 | 50,000 |
| HRA Exemption | Not Applicable | 1,20,000 (assumed) |
| Section 80C | Not Applicable | 1,50,000 |
| Section 80D | Not Applicable | 25,000 |
| Taxable Income | 14,25,000 | 11,55,000 |
| Tax (before cess) | 93,750 | 1,59,000 |
| Cess at 4% | 3,750 | 6,360 |
| Total Tax | 97,500 | 1,65,360 |
Under the FY 2025-26 new regime, tax on Rs 14.25 lakh is Rs 93,750 before cess. After the 4% Health and Education Cess, the total tax is Rs 97,500.
In this example, the new regime saves approximately Rs 67,860 compared with the old regime. However, the old-regime calculation assumes that the taxpayer is genuinely eligible for the Rs 1.2 lakh HRA exemption and the other deductions shown. If your HRA exemption, home-loan interest, or other eligible deductions are substantially higher, the old regime could become more competitive.
The right choice should therefore be based on your actual salary structure and eligible deductions, rather than income level alone.
How to Reduce Your Tax Liability Under the New Regime
Even without the traditional 80C route, there are practical ways to reduce your taxable income and manage your tax liability on a Rs 15 lakh salary under the new regime.
1. Maximise Eligible Employer NPS Contribution
Check whether your employer allows a portion of your salary package to be structured as an employer contribution to NPS. Under Section 80CCD(2), the eligible employer contribution can be claimed as a deduction even under the new regime, subject to the applicable limits.
For example, if your employer contributes Rs 1 lakh to your NPS and the full amount qualifies for the deduction, your taxable income could reduce from Rs 14.25 lakh to Rs 13.25 lakh. The actual tax saving will depend on the slab applicable to that portion of income.
2. Use the Standard Deduction Fully
The Rs 75,000 standard deduction is available to salaried individuals under the new regime for FY 2025-26. It is a flat deduction and does not require you to submit investment proofs or expense bills.
Make sure your employer considers it while calculating your TDS so that your tax liability is estimated correctly during the year.
3. Use Eligible Tax-Exempt Allowances Where Applicable
Certain allowances and reimbursements can continue to receive tax treatment under the new regime when they meet the applicable conditions. These may include expenses incurred for official duties and certain employer-provided facilities or reimbursements.
The exact tax treatment depends on the nature of the allowance and how it is structured. Therefore, check your salary components with your employer or tax professional rather than assuming every reimbursement is tax-free.
4. Make Investment Decisions Based on Your Goals
Just because 80C deductions are unavailable under the new regime does not mean you should stop investing. It simply means your investment decision should be based primarily on your financial goals, time horizon, liquidity needs, and risk profile rather than on tax-saving benefits.
For example, a SIP in mutual funds may be suitable for long-term wealth creation for some investors, while others may need a different combination of investments depending on their goals and risk tolerance.
Practical Indian Example: Rohan’s Tax Story
Consider Rohan, a 32-year-old software engineer in Pune earning Rs 15 lakh annually in FY 2025-26. After reviewing his salary structure, he discovers that his employer allows an eligible NPS contribution under Section 80CCD(2).
His gross salary is Rs 15 lakh, and after the Rs 75,000 standard deduction, his taxable income is Rs 14.25 lakh. If Rs 90,000 of eligible employer NPS contribution is additionally deductible, his taxable income could fall to Rs 13.35 lakh.
The exact tax saving depends on the applicable slab, but the contribution can reduce his taxable income while simultaneously building his retirement corpus. Rohan can then decide how to deploy the resulting cash-flow benefit toward his other financial goals.
The lesson is simple: understanding your tax regime and salary structure can be just as important as choosing between the old and new regimes.
Should You Switch Back to the Old Regime?
If you are a salaried employee, you can switch between the old and new tax regimes every year. The decision should be based on a simple comparison of your taxable income and final tax liability under both regimes.
- Calculate your taxable income under both regimes.
- Apply the applicable slab rates and calculate the tax.
- Include the standard deduction and any eligible deductions or exemptions.
- Add 4% Health and Education Cess to the applicable tax.
- Choose the regime with the lower final tax liability.
- Inform your employer of your preferred regime for TDS purposes.
For FY 2025-26, the new regime has become more attractive because of the revised slabs and enhanced Section 87A rebate. The revised structure provides nil tax up to ₹4 lakh, followed by 5%, 10%, 15%, 20%, 25% and 30% slabs. Resident individuals with total income up to ₹12 lakh can also benefit from the enhanced Section 87A rebate.
Therefore, the old regime should not be selected simply because you have some deductions. Compare the actual tax payable under both regimes based on your income, HRA, home loan interest, Section 80C, Section 80D and other eligible benefits.
Filing Your ITR Under the New Regime
Filing your Income Tax Return under the new regime is straightforward. Here are the key steps:
- Log in to the Income Tax e-filing portal.
- Select the correct ITR form based on your income sources.
- Check your pre-filled information using Form 16, Form 26AS and AIS.
- Select the new tax regime where applicable.
- Verify your salary, employer NPS contribution and other relevant details.
- Review your tax calculation and e-verify the return using an available method.
For salaried taxpayers, the applicable ITR form depends on their income sources, so do not automatically assume that ITR-1 is appropriate in every case. The Income Tax Department provides the applicable ITR requirements for each assessment year.
Common Mistakes to Avoid
- Using outdated tax slabs: Make sure you use the FY 2025-26 slabs rather than the FY 2024-25 structure.
- Ignoring the enhanced Section 87A rebate: For eligible resident individuals, the rebate can eliminate tax on total income up to ₹12 lakh under the new regime.
- Ignoring employer NPS contribution: Section 80CCD(2) remains an important benefit under the new regime.
- Assuming the new regime means no financial planning is needed: Your investment strategy still matters for long-term wealth creation.
- Choosing a regime based on someone else’s calculation: Compare your own income, deductions, and exemptions before making the decision.
Final Words
The tax on a Rs 15 lakh salary under the new regime needs to be calculated using the FY 2025-26 tax slabs. For a salaried individual earning Rs 15 lakh, the Rs 75,000 standard deduction reduces taxable income to Rs 14.25 lakh. Under the revised slabs, the income tax before cess works out to Rs 93,750, and after 4% Health and Education Cess, the total tax is approximately Rs 97,500.
That said, tax planning is only one part of the picture. How you invest the money you save, how you build wealth over time, and how you protect your family financially matters just as much. Choosing the right funds, SIPs, and financial products for your income level and goals is where real value is created.
Frequently Asked Questions
1. What is the exact tax on Rs 15 lakh salary under the new regime in FY 2025-26?
After the Rs 75,000 standard deduction, your taxable income is Rs 14,25,000. Applying the FY 2025-26 new regime slabs, the tax before cess is Rs 93,750. After adding 4% Health and Education Cess of Rs 3,750, the total tax payable is Rs 97,500.
2. Is the new regime better than the old regime for Rs 15 lakh earners?
It depends on your total deductions. The new regime has lower and revised slab rates, while the old regime allows deductions such as Section 80C, HRA, home loan interest, and 80D. Compare your actual tax liability under both regimes before deciding.
3. Can I switch between tax regimes every year?
Yes, salaried individuals can switch between the new and old regimes each financial year. You need to inform your employer of your preferred regime for TDS purposes. Taxpayers with business or professional income have additional restrictions on switching regimes.
4. What deductions are available under the new tax regime?
The main benefits for salaried individuals include the Rs 75,000 standard deduction and the employer’s NPS contribution deduction under Section 80CCD(2), subject to the applicable limits. Most popular deductions such as 80C, HRA and 80D are not available under the new regime.
5. Is income up to Rs 7 lakh tax-free under the new regime?
The limit is no longer Rs 7 lakh for FY 2025-26. Under the revised new regime, eligible resident individuals with total income up to Rs 12 lakh can claim a Section 87A rebate of up to Rs 60,000, effectively reducing their tax liability to zero, subject to the applicable conditions.
Disclaimer
The information provided in this blog is for educational and informational purposes only and should not be construed as investment advice. Please consult a qualified financial advisor before making any investment decisions. Shashikant Chanderkumar Mudaliar (ARN: 319377), operating under the brand name VSJ FinMart, is an AMFI-registered Mutual Fund Distributor (MFD) and does not provide investment advisory services. Mutual fund investments are subject to market risks. Past performance is not indicative of future results. Please read all scheme-related documents carefully before investing. Registration details can be verified at www.amfiindia.com/locate-distributor.