How to pay 0 tax on Rs 15,00,000 income in new tax regime; check out calculations

Does your salary come under the income tax bracket? Are you wondering how to save the entire tax on your salary? Well, there are many ways to save income tax. Salaries professionals can easily reduce their income tax liabilities by making some investments throughout the year. However, most taxpayers search for ways to save taxes when the ITR filing date approaches.

In this article, we will show you the calculations on how you can save tax on a Rs 15 lakh income under the new tax regime. But before that, let’s know the new tax regime slabs for FY 2025-26.

Income Tax Slabs          Tax Rate

Up to Rs. 4,00,000           NIL

Rs 4,00,001 – Rs 8,00,000   5%

Rs 8,00,001 – Rs 12,00,000   10%

Rs 12,00,001 – Rs 16,00,000    15%

Rs 16,00,001 – Rs 20,00,000   20%

Rs 20,00,001 – Rs 24,00,000   25%

Above Rs 24,00,000           30%

How to pay 0 tax on Rs 15,00,000 income

Let’s assume the basic salary is 50 per cent of your gross salary, i.e., Rs 7,50,000.

Standard deduction

New tax regime: Salaried taxpayers can get up to Rs 75,000 standard deduction on their salary under Section 87A of the Income Tax Act, 1961.

After this standard deduction, the taxable income will be Rs 15,00,000- Rs 75,000- Rs 14,25,000.

NPS

Under the new tax regime for FY 2025-26, a salaried person can get a tax benefit on the employer’s contribution to their National Pension System (NPS) account. They can take a maximum benefit of 14 per cent of the basic pay.

If your basic pay is Rs 7,50,000, then the maximum NPS deduction will be Rs 1,05,000.

Taxable income after NPS deduction: Rs 14,25,000- Rs 1,05,000= Rs 13,20,000.

EPF

Now, let’s move to the EPF (Employee Provident Fund) benefit. A salaried person can get a tax benefit of up to 12 per cent of their basic pay on the employer’s contribution to their Employees’ Provident Fund (EPF).

On a basic pay of Rs 7,50,000, the EPF contribution (12% of basic) will be Rs 90,000.

Taxable income after EPF benefits

Rs 13,20,000- Rs 90,000= Rs 12,30,000

PPF, Sukanya Samriddhi Account tax benefit

If a taxpayer under the new regime invests Rs 1,00,000 in the Sukanya Samriddhi Account and Rs 1,50,000 in their Public Provident Fund (PPF), they may additionally receive a tax advantage of Rs 17,500. 

After Rs 17,500 tax deduction, the taxable income will be 

Rs 12,30,000 -Rs 17,500= Rs 12,12,500.

Rs 1.50 lakh exemption on entertainment, mobile bills

The new tax regime also offers you tax benefits of up to Rs 1.50 lakh if you have paid tax on your entertainment, mobile, fuel, and transport bills. However, these benefits are available only when you have paid these bills for official purposes and you have to ask your company’s human resources (HR) manager to make these part of your gross salary. 

Let’s assume your reimbursements are.

Entertainment bills- Rs 40,000

Transport allowance- Rs 60,000

Fuel bills- Rs 25,000

Mobile bills- Rs 10,000

Uniform bills- Rs 15,000

After a Rs 1,50,000 exemption, your taxable income is reduced to Rs 12,12,000-Rs 1,50,000= Rs 10,62,000. 

Now, your income comes under the tax-free bracket of Rs 12,00,000. Hence, you need to pay 0 tax if you choose the new tax regime for FY 2025-26.

(Disclaimer: This is not investment advice. Do your due diligence or consult an expert for financial planning.)