Income Tax Calculator 2025-26: Tax Liabilities for Salaried Individuals with Salary Ranging from ₹12.75 Lakh to ₹1 Crore In her 8th budget speech on February 1, 2025, Finance Minister Nirmala Sitharaman introduced a revamped income tax structure designed to benefit salaried individuals. The changes, part of the Union Budget 2025-26, aim to provide substantial relief to the middle class while promoting higher savings, consumption, and investment. The new tax slabs and rebate structures under the new tax regime will make salary income up to ₹12.75 lakh tax-free, with several adjustments to reduce the tax burden on higher-income earners.
Revised Income Tax Slabs for Salaried Individuals Overview
Under the revised tax regime introduced in Budget 2025, the government has introduced revised income tax slabs and tax rebates, benefiting salaried individuals, particularly those in the ₹12.75 lakh to ₹1 crore income range.
Here is a quick summary of the major changes:
- Tax-free income up to ₹12.75 lakh: With the newly introduced tax rebate of ₹60,000 for income between ₹4 lakh and ₹12 lakh, salaried employees in this range will no longer be required to pay taxes.
- Increased standard deduction: The standard deduction for salaried individuals has been increased to ₹75,000.
- Higher tax savings for those earning between ₹18 lakh and ₹25 lakh, with specific savings percentages outlined.
Income Tax Calculation for Salary Between ₹12.75 Lakh and ₹1 Crore: A Detailed Breakdown
For salaried individuals with income between ₹12.75 lakh and ₹1 crore, the new tax structure offers both rebates and lower tax rates, leading to significant tax savings when compared to the previous regime.
The following table and calculations illustrate how tax liabilities will change under the new tax structure, based on various salary brackets:
Income Tax Calculation for ₹12.75 Lakh Salary
Particulars | Calculation |
Salary Income | ₹12,75,000 |
Less: Standard Deduction | ₹75,000 |
Net Taxable Income | ₹12,00,000 |
Tax Liability (Existing Regime – FY 2024-25) | ₹83,200 |
Tax Liability (Proposed Regime – FY 2025-26) | Nil* |
Benefit in Tax Liability | ₹83,200 |
% of Tax Savings | 100% |
Conclusion: For individuals with a salary of ₹12.75 lakh, the new regime eliminates all tax liabilities, offering 100% tax savings compared to the previous year.
Income Tax Calculation for ₹18 Lakh Salary
Particulars | Calculation |
Salary Income | ₹18,00,000 |
Less: Standard Deduction | ₹75,000 |
Net Taxable Income | ₹17,25,000 |
Tax Liability (Existing Regime – FY 2024-25) | ₹2,15,800 |
Tax Liability (Proposed Regime – FY 2025-26) | ₹1,50,800 |
Benefit in Tax Liability | ₹65,000 |
% of Tax Savings | 30.12% |
Conclusion: An individual earning ₹18 lakh will save ₹65,000, a 30.12% reduction in tax liability, under the new tax regime.
Income Tax Calculation for ₹25 Lakh Salary
Particulars | Calculation |
Salary Income | ₹25,00,000 |
Less: Standard Deduction | ₹75,000 |
Net Taxable Income | ₹24,25,000 |
Tax Liability (Existing Regime – FY 2024-25) | ₹4,34,200 |
Tax Liability (Proposed Regime – FY 2025-26) | ₹3,19,800 |
Benefit in Tax Liability | ₹1,14,400 |
% of Tax Savings | 26.35% |
Conclusion: A salaried individual earning ₹25 lakh will benefit from a 26.35% reduction in tax, amounting to a savings of ₹1,14,400 under the new regime.
Income Tax Calculation for ₹50 Lakh Salary
Particulars | Calculation |
Salary Income | ₹50,00,000 |
Less: Standard Deduction | ₹75,000 |
Net Taxable Income | ₹49,25,000 |
Tax Liability (Existing Regime – FY 2024-25) | ₹12,14,200 |
Tax Liability (Proposed Regime – FY 2025-26) | ₹10,99,800 |
Benefit in Tax Liability | ₹1,14,400 |
% of Tax Savings | 9.42% |
Conclusion: For individuals earning ₹50 lakh, the new tax regime results in a 9.42% savings of ₹1,14,400 in tax liability.
Income Tax Calculation for ₹1 Crore Salary
Particulars | Calculation |
Salary Income | ₹1,00,00,000 |
Less: Standard Deduction | ₹75,000 |
Net Taxable Income | ₹99,25,000 |
Tax Liability (Existing Regime – FY 2024-25) | ₹30,51,620 |
Tax Liability (Proposed Regime – FY 2025-26) | ₹29,25,780 |
Benefit in Tax Liability | ₹1,25,840 |
% of Tax Savings | 4.12% |
Conclusion: An individual earning ₹1 crore will enjoy a 4.12% reduction in tax, amounting to savings of ₹1,25,840 under the new tax structure.
Key Benefits of the Revised Tax Structure
- Rebate for income up to ₹12.75 lakh: With the revised rebate of ₹60,000, salaried employees with annual incomes up to ₹12.75 lakh will not have to pay any income tax.
- Higher Tax Savings for Middle-Class Earners: Tax savings of 30% or more for salaried individuals in the ₹18 lakh to ₹25 lakh income range.
- Increased Standard Deduction: Salaried employees will benefit from an enhanced standard deduction of ₹75,000, further reducing taxable income.
- Progressive Tax Rates: Tax slabs are designed to favor those in lower and middle-income brackets, ensuring fairer taxation for all.
Income Tax Slabs Under the New Tax Regime (2025-26)
Income Range (₹) | Tax Rate |
₹0 – ₹4 lakh | NIL |
₹4 lakh – ₹8 lakh | 5% |
₹8 lakh – ₹12 lakh | 10% |
₹12 lakh – ₹16 lakh | 15% |
₹16 lakh – ₹20 lakh | 20% |
₹20 lakh – ₹24 lakh | 25% |
Above ₹24 lakh | 30% |
New Income-tax Slab 2025-26 Live Updates
Income-tax slab | Income-tax rate | Surcharge |
₹ 15,00,001- ₹ 50,00,000 | ₹ 1,40,000 + 30% above ₹ 15,00,000 | Nil |
₹ 50,00,001- ₹ 100,00,000 | ₹ 1,40,000 + 30% above ₹ 15,00,000 | 10% |
₹ 100,00,001- ₹ 200,00,000 | ₹ 1,40,000 + 30% above ₹ 15,00,000 | 15% |
Above ₹ ₹ 200,00,001 | ₹ 1,40,000 + 30% above ₹ 15,00,000 | 25% |
Impact of the Revised Regime on the Economy
The tax relief offered through these changes is expected to drive higher consumption and boost savings and investments, thus supporting the economy’s growth trajectory. The government’s projection of a ₹1 lakh crore revenue loss from these tax cuts indicates the substantial benefit that taxpayers will experience.
Conclusion: Maximizing Savings Under the New Regime
The Union Budget 2025-26 offers a significant reduction in tax burdens for salaried employees, especially those with salaries ranging from ₹12.75 lakh to ₹1 crore. By adopting the new tax regime, salaried individuals can enjoy tax-free income up to ₹12.75 lakh and substantial tax savings for higher salary ranges. The revisions aim to provide relief, reduce the tax burden, and promote economic growth through increased savings and household consumption.
For salaried taxpayers, the changes in Budget 2025 will mark a major step forward in terms of tax relief and financial planning.