Income Tax on ₹12 Lakh Salary (FY 2026-27)
A ₹12 lakh salary is tax-free under the new regime in FY 2026-27: after the ₹75,000 standard deduction your taxable income is ₹11,25,000, and the Section 156 (earlier 87A) rebate cancels the ₹52,500 of slab tax. The old regime still charges ₹1,17,000 even with ₹1.5 lakh in Section 123 (earlier 80C). You can earn about ₹0.75 lakh more before any new-regime tax applies.
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Only affects the Old Regime exemption limit.
The New Regime saves you ₹1,17,000 per year compared to the other regime.
Old Regime
Includes standard deduction + the deductions you entered above.
Total Tax Payable
₹1,17,000
Effective rate: 9.8%
New Regime
Flat ₹75,000 standard deduction. No 80C/80D/HRA benefit.
Total Tax Payable
₹0
Effective rate: 0.0%
Smart tax-saving tips
Worked out from your numbers for FY 2026-27 (Tax Year 2026-27).
Save up to
₹1,17,000/yr
The New Regime saves you ₹1,17,000 a year
That's ₹9,750 more in hand every month than the Old Regime (₹0 vs ₹1,17,000 tax).
NPS would save ₹10,400, but only in the Old Regime
Investing ₹50,000 under Section 124 (earlier 80CCD(1B)) cuts Old Regime tax to ₹1,06,600, yet the New Regime (₹0) is still cheaper, and it doesn't allow this deduction. Invest in NPS for retirement, not for tax.
Old Regime needs ₹5,00,000 more in deductions to break even
Only if your extra Section 123 (earlier 80C), Section 126 (earlier 80D), NPS, HRA or home-loan claims add up to more than this does switching to the Old Regime pay off.
Ask your employer about NPS under Section 124 (earlier 80CCD(2))
Employer NPS contributions of up to 14% of basic salary are deductible even in the New Regime, and can be restructured out of your CTC.
Estimates for salaried individuals, based only on the deductions entered above. Not investment advice.
New Regime: where your income goes
Annual gross income under the recommended regime.
- Total₹12,00,000
| Breakdown | Old Regime | New Regime |
|---|---|---|
| Taxable Income (Annual) | ₹10,00,000 | ₹11,25,000 |
| Tax Payable (Annual) | ₹1,17,000 | ₹0 |
| Tax Payable (Monthly) | ₹9,750 | ₹0 |
| Take-Home (Annual) | ₹10,83,000 | ₹12,00,000 |
| Take-Home (Monthly) | ₹90,250 | ₹1,00,000 |
FY 2026-27 · Income-tax Act, 2025
Old vs new regime on ₹12 lakh
- New regime tax
- ₹0
- 0.0% of salary
- Old regime tax
- ₹1,17,000
- with ₹1.5 lakh 80C
- Monthly in-hand
- ₹1,00,000
- new regime, before PF and PT
- Break-even deductions
- ₹6,50,000
- for the old regime to match the new
| New regime | Old: no deductions | Old: ₹1.5L Section 123 | |
|---|---|---|---|
| Gross salary | ₹12,00,000 | ₹12,00,000 | ₹12,00,000 |
| Deductions | ₹75,000 | ₹50,000 | ₹2,00,000 |
| Taxable income | ₹11,25,000 | ₹11,50,000 | ₹10,00,000 |
| Rebate / marginal relief | − ₹52,500 | — | — |
| Health & education cess (4%) | ₹0 | ₹6,300 | ₹4,500 |
| Total tax | ₹0 | ₹1,63,800 | ₹1,17,000 |
Deductions are the standard deduction (₹75,000 new, ₹50,000 old) plus, in the last column, ₹1,50,000 under Section 123 (earlier 80C). Change the numbers in the calculator above to add HRA, home-loan interest, health insurance or NPS.
New regime
How the ₹11,25,000 of taxable income is taxed
| Slab | Rate | Income in slab | Tax |
|---|---|---|---|
| ₹0 – ₹4,00,000 | 0% | ₹4,00,000 | ₹0 |
| ₹4,00,000 – ₹8,00,000 | 5% | ₹4,00,000 | ₹20,000 |
| ₹8,00,000 – ₹12,00,000 | 10% | ₹3,25,000 | ₹32,500 |
| Slab tax before rebate and cess | ₹52,500 |
Watch the cliff: the rebate disappears once taxable income passes ₹12 lakh. Marginal relief softens the jump, but from about ₹13 lakh of salary the full slab tax applies. If a raise takes you over the limit, the new regime still usually wins unless you have large deductions.
FAQ
Frequently asked questions
How much income tax do I pay on a ₹12 lakh salary in FY 2026-27?
Under the new regime you pay ₹0 (taxable income ₹11,25,000 after the ₹75,000 standard deduction). Under the old regime you pay ₹1,63,800 with no deductions, or ₹1,17,000 if you invest ₹1.5 lakh under Section 123 (earlier 80C).
Which tax regime is better for a ₹12 lakh salary?
The new regime, unless your deductions are large. With only ₹1.5 lakh in Section 123 (earlier 80C) it saves ₹1,17,000 a year. The old regime only matches it once your total deductions (beyond the ₹50,000 standard deduction) reach about ₹6,50,000.
What is the monthly in-hand salary on ₹12 lakh?
₹12 lakh a year is ₹1,00,000 a month before tax. After income tax it is about ₹1,00,000 a month under the new regime, or ₹90,250 under the old regime with ₹1.5 lakh in Section 123 (earlier 80C). Employee PF and professional tax reduce it further; the salary calculator works these out from your CTC.
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Tax at nearby salaries
Want your exact in-hand pay with PF, gratuity and professional tax? Use the CTC to in-hand salary calculator. See state-wise slabs on the professional tax page.
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