Tax Tips: Package of Rs 12,75,000 and separate incentives, how much tax will have to be paid on choosing the new regime?

In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman has made a big announcement for the salaried. Under the new tax regime, she has made income up to Rs 12 lakh completely tax-free. Along with this, changes have also been made in the tax slab. In the new tax regime, the salaried also get a standard deduction of Rs 75,000. No matter how much your salary is, this deduction will be available in it.

Including standard deduction, no tax will have to be paid on annual income up to Rs 12,75,000. But suppose if the package of a salaried person is Rs 12,75,000, but he also earns an incentive of Rs 1,00,000 in a year, then on what basis will the tax be calculated? How much tax will he have to pay?

This will be the new tax regime after the budget.

0 to 4 lakhs - 0% tax
4 to 8 lakhs - 5% tax
8 to 12 lakhs - 10% tax
12 to 16 lakhs - 15% tax
16 to 20 lakhs - 20% tax
20 to 24 lakhs - 25% tax
More than 24 lakhs - 30% tax

Now understand how the tax will be calculated.

If your package is Rs 12,75,000 and you are getting an incentive of Rs 1,00,000, then you will have to pay tax on the incentive according to the slab. For its calculation, your income and incentive will be added. 12,75,000 + 1,00,000 = Rs 13,75,000. If you look at the income tax slab, you will fall in the slab of 12 to 16 lakhs and a 15% tax will be levied on it. In such a situation, you will have to pay a tax of Rs 15,000 on your incentive i.e. Rs 1,00,000 at the rate of 15%.

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