New income tax slabs for the year are announced. Find out your current tax bracket here!
Introduction
Many salaried professionals earning ₹10 lakh per annum struggle to understand how much tax will be deducted from their salary. Tax calculation varies based on old and new tax regimes, available deductions, and exemptions. This blog breaks down the applicable tax slabs, deductions, and tax-saving tips to help you determine your exact tax liability.
How Much Tax Will be Deducted for 10 Lakhs?
Tax on ₹10 lakh income is calculated based on old and new tax regimes. A ₹50,000 standard deduction applies in both.
- Old Regime: Tax varies based on deductions like 80C, 80D. After claiming deductions, tax can be reduced.
- New Regime: Tax is ₹78,000 after the standard deduction, with no additional exemptions.
Calculation of Tax on 10 Lakh Income
Under the new tax regime, there are no deductions except for the ₹50,000 standard deduction. After applying the standard deduction, taxable income becomes ₹9.5 lakh.
Tax Slabs for the New Regime (FY 2025-26)
| Taxable Income Slab (₹) | Tax Rate | Tax Amount (₹) |
| 0 – 2.5 lakh | 0% | 0 |
| 2.5 – 5 lakh | 5% | 12,500 |
| 5 – 7.5 lakh | 10% | 25,000 |
| 7.5 – 9.5 lakh | 15% | 30,000 |
| Total Tax Payable | ₹70,000 |
Final Tax Payable in the New Regime: ₹70,000 (after the standard deduction).
Who Should Choose the New Regime?
- People not claiming deductions under 80C, 80D, or 80TTB.
- Individuals who prefer a simpler tax structure with lower rates.
- Salaried employees without HRA, home loans, or tax-saving investments.
Understanding Tax Slabs Under Old & New Regime
The old tax regime offers higher tax rates but allows multiple deductions and exemptions. The new tax regime has lower tax rates but removes most deductions, making tax filing simpler.
Old vs. New Tax Slabs (FY 2025-26)
| Income Slab (₹) | Old Regime Tax Rate | New Regime Tax Rate |
| 0 – 2.5 lakh | Nil | Nil |
| 2.5 – 3 lakh | 5% | Nil |
| 3 – 5 lakh | 5% | 5% |
| 5 – 7.5 lakh | 20% | 10% |
| 7.5 – 10 lakh | 20% | 15% |
| 10 – 12.5 lakh | 30% | 20% |
| 12.5 – 15 lakh | 30% | 25% |
| Above 15 lakh | 30% | 30% |
Which is Better?
- Choose the Old Regime if you claim higher deductions (₹2 lakh+), such as 80C, 80D, or HRA.
- Choose the New Regime if you have minimal deductions, as it results in a lower tax liability with simpler compliance.
Income Tax on 10 lakh: Calculation Example
Scenario 1: Old Tax Regime (With Deductions)
- Basic Salary: ₹10,00,000
- Standard Deduction: ₹50,000
- Deductions under Sections 80C, 80D, 80TTB: ₹2,00,000
- Taxable Income: ₹7,50,000
Tax Payable (As Per Old Slab Rates):
|
Taxable Income Slab (₹) |
Tax Rate |
Tax Amount (₹) |
| 0 – 3 lakh | 0% | 0 |
| 3 – 5 lakh | 5% | 10,000 |
| 5 – 7.5 lakh | 20% | 50,000 |
| Total Tax Payable | ₹60,000 |
Final Tax Payable (Old Regime): ₹60,000
Scenario 2: New Tax Regime (No Deductions)
- Basic Salary: ₹10,00,000
- Standard Deduction: ₹50,000
- Taxable Income: ₹9,50,000
Tax Payable (As Per New Slab Rates):
| Taxable Income Slab (₹) | Tax Rate | Tax Amount (₹) |
| 0 – 2.5 lakh | 0% | 0 |
| 2.5 – 5 lakh | 5% | 12,500 |
| 5 – 7.5 lakh | 10% | 25,000 |
| 7.5 – 9.5 lakh | 15% | 30,000 |
| Total Tax Payable | ₹67,500 |
Final Tax Payable (New Regime): ₹67,500
Which is Better?
- Old Regime Saves ₹7,500 if deductions exceed ₹2 lakh.
- The new Regime is better for those not claiming deductions and looking for simpler tax filing.
How Much Tax Will Be Deducted for 10 Lakhs CTC?
Difference Between CTC and Take-Home Salary
- CTC (Cost to Company) includes basic salary, employer’s PF contribution, gratuity, allowances, and bonuses.
- Take-home salary is what you actually receive after deducting PF, professional tax, and income tax.
Tax Calculation: ₹10 Lakh CTC vs. ₹10 Lakh Gross Salary
| Component | ₹10 Lakh CTC | ₹10 Lakh Gross Salary |
| Basic Salary (50% of CTC) | ₹5,00,000 | ₹10,00,000 |
| HRA (40% of Basic, if applicable) | ₹2,00,000 | – |
| Other Allowances | ₹2,50,000 | – |
| Employer’s PF Contribution (12%) | ₹60,000 | – |
| Gratuity (4.81%) | ₹48,100 | – |
| Gross Salary (After Removing Employer Contributions) | ₹8,91,900 | ₹10,00,000 |
| Standard Deduction | ₹50,000 | ₹50,000 |
| Taxable Income (New Regime) | ₹8,41,900 | ₹9,50,000 |
| Income Tax Payable (New Regime) | ₹55,785 | ₹67,500 |
Final Take-Home Salary (Post Tax & PF): ₹8.35-8.45 Lakh (Approx.)
Takeaways:
- CTC is not your actual salary; employer contributions to PF and gratuity reduce take-home pay.
- Income tax on ₹10 lakh CTC is lower than on ₹10 lakh gross salary, as taxable income is lower.
- Choosing tax-saving investments (80C, 80D, etc.) can further reduce tax liability.
How to Save Tax on 10 Lakh Income?
You can reduce taxable income and save tax by investing in eligible tax-saving instruments and claiming deductions.
1. Invest in Tax-Saving Instruments (Section 80C – ₹1.5 Lakh Limit)
Deduct up to ₹1.5 lakh by investing in:
-
-
Public Provident Fund (PPF)
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Equity-Linked Savings Scheme (ELSS)
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Tax-Saving Fixed Deposits (5-year FDs)
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Life Insurance Premiums (LIC)
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2. Claim Health Insurance Deduction (Section 80D – Up to ₹75,000)
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- ₹25,000 for self, spouse, and children
- ₹50,000 for senior citizen parents
3. Claim House Rent Allowance (HRA)
If you live in a rented house, HRA can reduce taxable income. The exemption depends on rent paid, HRA received, and basic salary.
4. Deduct Home Loan Interest (Section 24(b) – Up to ₹2 Lakh)
Claim ₹2 lakh deduction on home loan interest for a self-occupied property.
5. Get Extra Deduction via NPS (Section 80CCD(1B) – ₹50,000)
Contributing to the National Pension Scheme (NPS) gives an additional ₹50,000 deduction beyond 80C.
Total Potential Tax Savings: ₹5.25 Lakhs.
By using these deductions, taxable income drops, reducing tax liability under the old tax regime.
Don’t let tax confusion hold you back!
Reach out to a Vakilsearch expert now for personalized ITR filing advice and avoid any tax pitfalls.
Common Mistakes to Avoid When Filing Tax for ₹10 Lakh Salary
Many taxpayers overpay taxes due to simple errors. Avoid these common mistakes to maximize savings.
1. Choosing the Wrong Tax Regime
The old tax regime is better if deductions exceed ₹2.5 lakh. The new tax regime is simpler but allows fewer exemptions.
2. Not Declaring Additional Income Sources
Include fixed deposit interest, rental income, or capital gains. Missing these can lead to penalties and additional tax liability.
3. Missing Deductions Under Key Sections
Section 80C includes PPF, ELSS, and five-year fixed deposits up to ₹1.5 lakh. Section 80D allows a health insurance deduction of ₹25,000 for self and ₹50,000 for parents. Section 80TTB provides a ₹50,000 exemption on interest income for senior citizens.
4. Ignoring Tax-Free Allowances
House rent allowance, leave travel allowance, and meal coupons help reduce taxable salary.
Checklist for Tax Filing
Choose the right tax regime based on deductions. Declare all income sources to avoid penalties. Claim eligible deductions before filing. Utilize tax-free allowances for extra savings.
Smart tax planning is essential for maximizing savings and reducing unnecessary tax payments. Choosing the right tax regime and claiming eligible deductions can significantly lower tax liability. If you are unsure about the best approach for your income structure, seeking professional assistance can help. Vakilsearch offers expert tax filing and planning services to ensure you save the most.
Get professional tax assistance today. Visit Vakilsearch’s Tax Filing Services to get started.
FAQs
How much tax do I have to pay for 10 lakhs?
Tax on a ₹10 lakh income depends on the chosen tax regime. Under the old regime, after claiming deductions, tax can be around ₹60,000. Under the new regime, with no deductions, tax is ₹70,000 after the standard deduction.
Is 10 lakhs salary zero tax?
A ₹10 lakh salary is not tax-free unless deductions significantly reduce taxable income. Under the new regime, tax is applicable, while in the old regime, claiming deductions under 80C, 80D, and HRA can lower tax liability.
How is tax calculated on a 10 lakh income under the old regime?
The old regime allows deductions like ₹1.5 lakh under 80C, ₹25,000 under 80D, and ₹50,000 standard deduction. After applying deductions, taxable income is reduced, and tax payable is approximately ₹60,000.
What is the tax on a 10 lakh income under the new tax regime?
Under the new tax regime, a ₹50,000 standard deduction applies, reducing taxable income to ₹9.5 lakh. Based on the slab rates, the final tax payable is ₹70,000.
What are the tax implications for a 10 lakh CTC?
A ₹10 lakh CTC includes employer contributions to PF and gratuity, which are not part of taxable salary. After deductions like PF and professional tax, the actual taxable income is lower, leading to reduced tax liability.
