The New Financial Year starts on April 1, 2026. The New Tax Regime allows tax-free income up to 12 lakh rupees. Employees can save taxes on a salary of 20 lakh rupees by structuring their salary smartly.
A standard deduction of 75,000 rupees is available under the New Tax Regime. The meal benefit limit increased from 50 rupees to 200 rupees per meal. Employer contributions to EPF provide an additional tax exemption of 1.2 lakh rupees.
Employer contributions to NPS can yield up to 1.4 lakh rupees in tax exemptions. Car lease arrangements can significantly increase tax deductions. Net salary after deductions can be reduced to 12.11 lakh rupees for tax calculations.
Taxable income can be reduced to 11.36 lakh rupees after applying the standard deduction. Total tax liability can be zero under the New Tax Regime with proper salary structuring. Without a car lease, taxable income would be higher at 15.59 lakh rupees, resulting in a tax of 1.18 lakh rupees.
Salary structure is crucial for maximizing tax savings in the New Tax Regime—employees must consider all available exemptions and deductions.
