How to pay 0 tax on annual income of Rs 15,50,000 under the new tax system? Check calculation
Income Tax Return (ITR) applications have begun for the start of fiscal year 2024-25. Meanwhile, the Income Tax (IT) department has extended the deadline for filing ITR submissions in fiscal 2024-25 to September 15, 2025. The last date is July 31, 2025. Taxpayers can choose two tax systems – the old and new system – based on their wages and investments throughout the year. In this article, we will see experts calculate how to pay an annual income tax of Rs 15,50,000 under the new tax regime for fiscal year 2025-26.
New tax system: reach 0 taxes
To pay zero tax on income of Rs 15.5 lakh under the new regime, you need to reduce your taxable income to Rs 12,00,000. For salaried employees, the new tax regime allows for additional benefits of Rs 75,000 (standard deduction).
Tax planners say home loans can provide valuable tax benefits under the old and new tax regime, but the nature and scope of these benefits vary.
Deducting mortgages under new tax schemee
The new tax system offers lower tax rates, but eliminates most deductions and exemptions. According to the tax planner, you can require unlimited interest deductions on a home loan under a rental property without deductions for self-occupied property.
Understanding through charts
Other factors of weight
Although home loan benefits play an important role, they should not be the only criterion when choosing a tax regime. Several other factors deserve careful consideration.
Pay 0 tax for salary calculated as Rs 15,50,000
Salary breakup
CTC: Rs 15,50,000
Basic salary: Rs 6,00,000
Personal allowance: Rs 3,44,540
PF: Rs 21,600 (lowest option)
Tips: Rs 28,860
Variable wage: Rs 1,55,000 (10% of the base wage)
Flexi Payment Duty Free Component: Rs 4,00,000
Total CTC: Rs 15,50,000
Standard deduction wages
Rupee 15,50,000-Rs 75,000 = Rs 14,75,000
NPS
If you choose NP, you can invest 14% of your base salary under the new tax system, under the government regulations. The limit is 10% of the basic salary under the old tax system.
15,50,000 rupees – 84,000 rupees (6,00,000*14%) = 13,91,000 rupees
Flexi Pays Tax-free Part
13,91,000 rupees – 4,00,000 rupees = 9,91,000 rupees
Home loan interest + rental income setting
If the house is for rent, the limit is Rs 2,60,000.
Interest deduction: Rs 200,000
Rental income adjustment: Rs 60,000
Rs 9,91,000 – Rs 2,60,000 = Rs 7,31,000
Other comments
Gifts, family pensions, etc.: Rs 50,000
Rs 7,31,000 – Rs 50,000 = Rs 6,81,000 (final taxable income)
Therefore, since the final taxable income is less than Rs 12,00,000, the tax will be 0.
