Revenue tax return (ITR) submitting has already began for FY25 (AY26). In the meantime, the Revenue Tax Division has prolonged the deadline to file ITR for FY25 to September 15, 2025, from the unique deadline of July 31, 2025. There are two tax regimes: outdated and new. Taxpayers can select between these regimes as per their wage and investments all year long. On this article, let’s check out an instance to learn the way one can plan their taxes in an optimum method to make their tax outgo nil on annual earnings of Rs 15,50,000 beneath the brand new tax regime for FY26 (AY27).
New Tax Regime: The best way to convey your tax legal responsibility on Rs 15.5 lakh annual earnings to nil?
To pay zero tax on Rs 15.5 lakh earnings beneath the brand new regime, it’s essential to cut back your taxable earnings to Rs 12,00,000 (Rs 12.75 lakh with customary deduction).
Let’s take an instance the place an worker’s gross wage is Rs 15.5 lakh, together with a fundamental pay of Rs 7.75 lakh. Usually, the essential pay is about 40-50 per cent of CTC.
- Primary Pay: Rs 7,75,000
- Permitted reimbursements: Rs 1,00,000
- NPS: Rs 1,08,500
- EPF: Rs 21,600 (minimal opted)
House loans present beneficial tax advantages beneath each the outdated and new tax regimes, however the nature and extent of those advantages differ, say tax planners.
Deductions for dwelling loans beneath the brand new tax regime
The brand new tax regime gives decrease tax charges however eliminates most deductions and exemptions.
Calculations to pay 0 tax on wage of Rs 15,50,000/annum
NPS
In the event you go for NPS, then you may make investments 14 per cent of your fundamental wage beneath the brand new tax regime, as per the federal government guidelines. The restrict is 10 per cent of fundamental wage beneath the outdated tax regime.
Rs 15,50,000 – Rs 1,08,500 (6,00,000*14%) = Rs 14,41,500
EPF
Rs 14,41,500 – Rs 21,600 = Rs 14,19,900
Permitted reimbursements
Rs 13,91,000 – Rs 1,00,000= Rs 12,91,000
House mortgage set-off
You’ll be able to declare tax profit when you’ve got rented out the property and are incomes rental earnings from it. In that case, you may subtract as much as Rs 2 lakh of curiosity paid on the mortgage from the hire you earn to scale back your taxable earnings.
Rs 12,91,000 – Rs 2,00,000 = Rs 10,91,000
In different phrases, one can declare limitless deductions for curiosity on a house mortgage beneath let-out property and no deduction for self-occupied property.
Though dwelling mortgage advantages play an vital position, they shouldn’t be the one standards when deciding on a tax regime, say tax planners.
A number of different components advantage cautious consideration.
Therefore, the tax will probably be 0 as the ultimate taxable earnings is under Rs 12,00,000.
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