The new tax season brings countless worries and questions, from figuring out the right tax regime to looking for the best tax-saving options. Safe to say, filing ITRs and navigating the tax regime can quickly overwhelm you.
The FY 2025-26 lets you choose between the old tax regime and the new one, allowing you to opt for the regime that benefits you most. While the old regime offers more deductions, the new regime provides lower tax slabs.
Choosing which regime to follow requires a detailed assessment of your income as well as the tax exemptions and deductions available to you.
This article will explore the updated 15 lakhs income tax rates and help you maximise your tax savings on a 15 lakhs salary.
Major Updates Under Budget 2025
The 2025-26 Union Budget has introduced some key changes to the tax regime, including modified tax slab rates and increased rebates.
The following table illustrates the updated income tax rates for the fiscal year 2025-26 according to the new tax regime:
Total income in rupees
Rate of tax
Up to 4 lakhs
0%
4 to 8 lakhs
5%
8 to 12 lakhs
10%
12 to 16 lakhs
15%
16 to 20 lakhs
20%
20 to 24 lakhs
25%
Over 24 lakhs
30%
These tax revisions significantly reduce the tax amount payable by individuals in the 15 lakhs tax slab by lowering the tax rate for that income bracket.
Here is a comparison of the tax rates according to the old vs new tax regimes:
Total income in rupees
Tax rate in the old regime
Tax rate in the new regime (2025)
Up to Rs. 2.5 lakhs
0%
0%
Rs. 2.5 lakhs – Rs. 4 lakhs
5%
0%
Rs. 4 lakhs – Rs. 8 lakhs
5%
5%
Rs. 8 lakhs – Rs. 12 lakhs
20%
10%
Rs. 12 lakhs – Rs. 16 lakhs
30%
15%
Rs. 16 lakhs – Rs. 20 lakhs
30%
20%
Rs. 20 lakhs – Rs. 24 lakhs
30%
25%
Over Rs. 24 lakhs
30%
30%
While the new tax regime introduces some much-needed financial relief for the people, you can still opt for the old tax regime if the deductions and exemptions claimed under it benefit you more.
Tax Exemptions and Deductions Under the New Tax Regime
The new tax regime offers valuable tax deductions that can help you reduce liabilities on 15 lakhs salary tax, including:
1. Rs. 50,000 flat deduction for salaried and pensioned individuals
2. Standard deduction up to Rs. 75,000 for salaried employees
3. Deductions up to Rs. 25,000 under Section 57(iia) (family pension received)
4. Deductions under Section 80CCD (2) (employer’s contribution to the National Pension Scheme)
5. Deduction under Section 80 CCH (investment in Agniveer Corpus)
6. Tax exemption on voluntary retirement under Section 10(10C), gratuity u/s 10(10), and Leave encashment u/s 10(10AA).
However, the deductions and exemptions offered by the new regime are limited compared to the old regime, with certain key deductions no longer available.
Some changes to tax deductions to keep in mind are:
1. Tax exemptions, such as House Rent Allowance (HRA) and Leave Travel Allowance (LTA), are no longer available.
2. Deductions under Section 80C, such as life insurance and PF contributions, have been removed.
3. Exemptions for transport and medical allowances are also unavailable.
Old vs New Tax Regime: Which is Better For Income Tax on 15 Lakhs?
Which tax regime one should opt for will vary from person to person, as the income tax for 15 lakhs can differ according to factors like investments and income type.
The best tax regime for you will depend on your applicable income bracket. You must carefully review the exemptions and deductions available to you under each regime. This process may also include a review of your income source and investments.
As a general rule, opt for the old tax regime if your income-saving investments are over Rs. 3,75,000. If your income-saving investments are less than that, the lower tax rates offered by the new tax regime might benefit you more.
Wrapping Up
Careful tax planning and thorough analysis of the old vs. new tax regime are key to maximising your tax savings on 15 lakhs income and cutting down on liabilities. Learn how to plan your taxes the smart way with Tata Capital’s guides on tax on 7 lakh income and tax on 12 lakhs income.
Start the journey towards your homeownership goals today with Tata Capital’s flexible home loan at attractive interest rates.
To learn more, check the Tata Capital website or download the app.
The tax regime that best fits you will depend on the exemptions and deductions for which you are eligible. You can benefit from lower tax liability under the old regime if your tax-saving investments exceed Rs. 3,75,000. Otherwise, the new tax regime would be best.
Can I pay zero tax on 15 lakhs salary?
Under the new tax regime, incomes up to Rs. 12 lakhs are exempt from taxes. However, you can still pay zero tax on 15 lakhs salary by making smart use of exemptions and deductions, such as the deductions for senior citizens available under section 80D and the standard deduction of Rs. 50,000. You can also invest your Rs. 1.5 lakhs ELSS and PPF under section 80C, or Rs, 50,000 in National Pension Scheme under section 80CCD(1B).
What are the key tax-saving deductions available for individuals earning above Rs. 15 lakhs?
Individuals who have to pay tax on 15 lakhs salary can avail key tax deductions like those for investments, such as PPF, LIC, and ELSS, under section 80C, medical insurance premiums under section 80D, education loan interest under section 80E, and charity donations under section 80G. You can also benefit from HRA, LTA, and standard deduction depending on your eligibility.
What is 30% in 15 lakhs?
30% is the average rate of income tax on 15 lakhs salary that you will have to pay under the old tax regime. This totals Rs. 4,53,00 and leaves you with a net annual income of Rs. 10,47,000.
10 March 2025
4 mins read
Previous Post
