What you actually pay at every salary level, and the two thresholds where a raise can leave you with less money than before it.
Corrected 29 August 2026. An earlier version of this page excluded target variable pay from both received cash and taxable salary, which understated income tax. Figures are recalculated under model PS-A3. What changed →
Short answer: under the new regime, salary up to ₹12.75 lakh is taxed at zero. Above that, the effective rate climbs from 6.5% at ₹15 lakh to 29.3% at ₹1 crore — well below the headline slab rates, because the slabs apply in slices.
New tax regime, Tax Year 2026-27 and FY 2026-27 · Rates and slabs are indicative, as of August 2026. Budget 2026 (1 February) left the slabs, cess, surcharge and the Section 156(2)(a) rebate untouched, so the same numbers hold for FY 2026-27
| Gross salary | Income tax | Effective rate | After tax | Monthly TDS |
|---|---|---|---|---|
| ₹5 Lakh | ₹0 | 0.0% | ₹5.00 L | ₹0 |
| ₹7 Lakh | ₹0 | 0.0% | ₹7.00 L | ₹0 |
| ₹10 Lakh | ₹0 | 0.0% | ₹10.00 L | ₹0 |
| ₹12 Lakh | ₹0 | 0.0% | ₹12.00 L | ₹0 |
| ₹15 Lakh | ₹97,500 | 6.5% | ₹14.03 L | ₹8,125 |
| ₹20 Lakh | ₹1.92 L | 9.6% | ₹18.08 L | ₹16,033 |
| ₹25 Lakh | ₹3.20 L | 12.8% | ₹21.80 L | ₹26,650 |
| ₹30 Lakh | ₹4.76 L | 15.9% | ₹25.24 L | ₹39,650 |
| ₹50 Lakh | ₹11.00 L | 22.0% | ₹39.00 L | ₹91,650 |
| ₹1 Crore | ₹29.26 L | 29.3% | ₹70.74 L | ₹2,43,815 |
Includes the ₹75,000 standard deduction, Section 156(2)(a) rebate, marginal relief, surcharge and 4% cess. Assumes salary income only.
Indian income tax has two cliffs, and both catch people who never see them coming.
The rebate cliff, ₹12.76 lakh to ₹13.48 lakh. The Section 156(2)(a) rebate makes tax zero up to ₹12.75 lakh gross. Cross it and the rebate disappears entirely rather than tapering. Marginal relief softens the landing but does not remove it — at ₹13.25 lakh gross you take home ₹2,000 less than at ₹12.75 lakh.
The surcharge cliff, ₹50.75 lakh to ₹53.5 lakh. A 10% surcharge applies once taxable income passes ₹50 lakh, levied on the whole tax figure. Again marginal relief applies, and again it is imperfect: a ₹1 lakh raise inside this band is worth about minus ₹4,000.
In both cases the fix is the same. Push the increment past the far edge of the band, or take the excess as employer NPS under Section 124(2), which is deductible even under the new regime.
Rarely, and less often as income rises. The break-even level of deductions is roughly ₹5.4 lakh at ₹15 lakh gross, ₹7.1 lakh at ₹20 lakh, and plateaus around ₹8 lakh above that.
Set against the ceilings — ₹1.5 lakh for 80C, ₹50,000 for 80CCD(1B), ₹25,000 to ₹50,000 for 80D — you would need ₹4 lakh or more from HRA and home loan interest alone to get there. Possible with a large loan in a metro; unusual otherwise.
Up to ₹12.75 lakh gross. The ₹75,000 standard deduction brings taxable income to ₹12 lakh, which qualifies for the full Section 156(2)(a) rebate under the new regime.
The new regime, for the large majority. The old regime only wins once deductions exceed roughly ₹5.4 lakh at ₹15 lakh gross, rising to about ₹8 lakh at higher incomes — thresholds most people cannot reach.
Related: Income Tax Calculator · In-Hand Salary by CTC · Old vs New Regime · Section 80C Guide
Just started working? For most freshers the regime choice is a non-choice — the first-job regime guide explains why, and who the exceptions are.
A note on section numbers. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 with effect from 1 April 2026. Section numbers on this page are those of the 2025 Act. Where you know a provision by its old number, the mapping is: 115BAC → 202, 87A → 156, 16(ia) → 19, 80CCD(2) → 124, 112A → 198, 10(10) → 19(1) Table Sl. Nos. 3-6.
The official pages this page is checked against. If one of them disagrees with us, it wins.
Written and checked by the PaisaSamajh editorial desk · Last reviewed: 24 August 2026 · How we check this →