How much income tax on a Rs 12 lakh salary

Under the new regime, a salaried person gets a Rs 75,000 standard deduction, bringing a Rs 12 lakh salary down to Rs 11,25,000 taxable. Because the 87A rebate makes tax nil up to Rs 12,00,000 of total income, the tax works out to zero. In fact, a salary up to about Rs 12,75,000 can come to nil tax once the standard deduction is applied.

The new-regime slabs are nil up to Rs 4 lakh, 5% from Rs 4-8 lakh, 10% from Rs 8-12 lakh, and higher above that. At Rs 11,25,000 taxable, the computed tax before rebate would be modest — but the 87A rebate wipes it out entirely, which is why the headline is zero.

In the old regime, a Rs 12 lakh salary (after the Rs 50,000 standard deduction) faces tax running into well over a lakh before deductions. You'd need to stack 80C, NPS, 80D, HRA and home-loan interest substantially just to approach the new regime's zero — so for most, the new regime clearly wins at this level.

The zero-tax result assumes salary is your only income. Interest, rent, capital gains or freelance income add on top and can push your total income past Rs 12,00,000, at which point tax begins. Reconcile all your income before assuming nil tax.

If your employer is deducting TDS without accounting for the regime that gives you zero tax, you may be over-paying through the year and waiting for a refund. Declare the right regime to your employer so your take-home reflects the actual nil liability.