Earn Up to ₹15 Lakh Salary Without Paying Tax? Here's How the New Tax Regime Works

Balasahana Suresh
Introduction

The new income tax regime in india has created a lot of buzz, especially with claims that individuals can earn up to ₹15 lakh and still pay little or no tax. While this sounds attractive, the reality is slightly more nuanced. The benefit depends on rebates, deductions, and how taxable income is calculated.

Understanding the New Tax Regime

The new tax regime offers lower tax rates but removes most deductions and exemptions. It is designed to simplify tax filing.

Latest Tax Slabs (FY 2025–26)

  • Up to ₹4 lakh – No tax
  • ₹4–8 lakh – 5%
  • ₹8–12 lakh – 10%
  • ₹12–16 lakh – 15%
  • ₹16–20 lakh – 20%
  • Above ₹24 lakh – 30%
How Income Becomes Tax-Free

1. Rebate Under Section 87A

The biggest benefit comes from the rebate:

  • Up to ₹60,000 tax rebate available
  • Makes income up to ₹12 lakh effectively tax-free
2. Standard Deduction Benefit

For salaried individuals:

  • Standard deduction: ₹75,000
  • This increases tax-free income limit to about ₹12.75 lakh
Can You Earn ₹15 Lakh and Pay zero Tax?

The Truth Explained

You cannot fully avoid tax at ₹15 lakh income, but you can significantly reduce it.

  • Tax-free limit ≈ ₹12–12.75 lakh
  • Income above this is taxed as per slabs
  • However, marginal relief reduces the extra burden slightly
So the claim is partially true but slightly misleading.

Example Calculation (₹15 Lakh Salary)

Gross Income: ₹15,00,000

Less Standard Deduction: ₹75,000

Taxable Income: ₹14,25,000

Tax is then calculated using slab rates (mainly 10% and 15% brackets), meaning you will still pay some tax.

Why people Think ₹15 Lakh Is Tax-Free

There are a few reasons for the confusion:

  • Misinterpretation of rebate benefits
  • Ignoring taxable income after deductions
  • Viral social media claims simplifying the concept
In reality, only income up to around ₹12–12.75 lakh can be fully tax-free under the new regime.

Key Benefits of the New Tax Regime

  • Simpler tax structure
  • Lower tax rates
  • No need to invest just to save tax
  • Ideal for people with fewer deductions
Limitations to Consider

  • No major deductions (like 80C, HRA, home loan interest)
  • May not suit individuals with high investments
  • Slightly higher tax if income exceeds rebate threshold
Final Verdict

While you cannot completely avoid tax on ₹15 lakh income, the new tax regime still offers significant relief. With rebates and standard deduction, a large portion of income becomes tax-free, making it especially beneficial for middle-income salaried individuals.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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