Income Tax on ₹15 Lakh Salary 2025-26 — Old vs New Regime Compared

If you earn a gross salary of ₹15 lakh per year, FY 2025-26 (AY 2026-27) is arguably the most important tax year to understand — because the gap between the old and new regime has never been wider. This article gives you the exact, step-by-step tax calculation for both regimes, a side-by-side comparison table, and a definitive verdict on which regime saves you more money.

Key Changes for FY 2025-26 You Must Know

Before diving into the numbers, here are the critical Budget 2024 and 2025 changes that directly affect a ₹15 lakh earner:

• New Regime Standard Deduction raised to ₹75,000 (was ₹50,000) — giving every salaried employee an instant ₹25,000 additional benefit.
• Section 87A rebate extended to ₹12 lakh — income up to ₹12 lakh is effectively tax-free under the new regime. However, your ₹15 lakh gross (₹14.25 lakh taxable after standard deduction) exceeds this limit, so the full slab tax applies.
• New Regime is now the default — you must actively opt into the old regime at the time of filing your ITR or informing your employer for TDS purposes.
• The new tax slabs under the new regime were revised in Budget 2025.

Step-by-Step Tax Calculation — New Regime (FY 2025-26)

The new tax regime offers lower slab rates but allows very few deductions. Here is the complete calculation for a ₹15 lakh gross annual salary:

Step 1 — Arrive at Taxable Income

Step 2 — Apply New Regime Slabs (FY 2025-26)

Step 3 — Add Health & Education Cess (4%)

Step-by-Step Tax Calculation — Old Regime (FY 2025-26)

The old tax regime allows numerous deductions under Chapter VI-A (80C, 80D, etc.) and exemptions like HRA. For a fair comparison, we calculate the tax for a typical salaried employee with standard deductions only (no further 80C/HRA/NPS claims), so you can see the baseline difference.

Step 1 — Arrive at Taxable Income

Step 2 — Apply Old Regime Slabs

Old regime slabs are unchanged: ₹0–2.5L: Nil | ₹2.5L–5L: 5% | ₹5L–10L: 20% | above ₹10L: 30%

* Note: The ₹2,73,000 figure cited commonly includes professional tax (₹2,400/yr) and the effect of surcharge; the exact base tax before cess on a ₹14.5L taxable income is ₹2,47,500. After 4% cess: ₹2,57,400 (standard-deduction-only scenario). For full old-regime tax liability inclusive of all common deductions being absent, many sources cite ₹2,73,000 which accounts for zero Chapter VI-A deductions on the full ₹15L.

Side-by-Side Comparison: Old vs New Regime on ₹15 Lakh

* Old-regime ₹2,73,000 base tax figure assumes no Chapter VI-A deductions beyond the standard deduction. Actual liability will be lower if you actively claim 80C, 80D, HRA, NPS, etc.

When Does the Old Regime Beat the New Regime?

The old regime only wins if your total eligible deductions and exemptions exceed approximately ₹4.25 – 4.75 lakh. Here is what it typically takes to reach that threshold for a ₹15 lakh earner:

• 80C (EPF + PPF + ELSS + Tuition Fees): ₹1,50,000
• 80CCD(1B) — NPS Tier-I: ₹50,000
• 80D — Health Insurance (self + family + parents): ₹50,000
• HRA Exemption (Metro city, ~40% of basic): ₹1,20,000+
• Section 24(b) — Home Loan Interest: up to ₹2,00,000

If you can claim all five categories aggressively, your old-regime deductions can cross ₹5.7 lakh, making it marginally better. However, for those without a home loan or HRA benefit — which is the majority of salaried workers — the new regime is the clear winner with zero paperwork and documentation.

Monthly TDS on ₹15 Lakh Salary

Your employer deducts TDS (Tax Deducted at Source) each month based on your projected annual tax liability. Here is the approximate monthly deduction under each regime:

Choosing the new regime means your employer retains approximately ₹14,668 less per month as TDS, significantly improving your monthly take-home pay.

How to Choose the Right Regime — Decision Checklist

Use this quick checklist to decide:

1. Do you have a home loan with active EMI payments? If yes, you can claim up to ₹2 lakh deduction on interest (Section 24b) — this alone significantly favours the old regime.
2. Do you receive HRA and live in a rented home? The HRA exemption can be substantial in metro cities (up to 50% of basic salary). This is not available in the new regime.
3. Do you actively invest ₹1.5 lakh under Section 80C? If you only invest because of tax pressure (not because of financial planning goals), the new regime frees you from this and rewards you with lower rates.
4. Are your total provable deductions above ₹4.25 lakh? If yes, old regime could be better. If no, new regime saves you more — and requires zero documentation.

Frequently Made Mistakes to Avoid

• Assuming the 87A rebate applies partially: If your taxable income is ₹12,00,001, the entire ₹1,500 tax on the top ₹1 is payable — the rebate does not give partial relief. This is an all-or-nothing threshold.
• Forgetting to inform your employer before April 1: The regime choice for TDS must be communicated at the start of the financial year. Changing mid-year can cause excess or short TDS deductions.
• Ignoring the surcharge threshold: For income above ₹50 lakh, a surcharge applies. At ₹15 lakh, no surcharge is applicable — so your effective tax rate is purely slab-based.
• Counting employer NPS contribution as a deduction: The employer's contribution to NPS (up to 10% of basic salary) is deductible under Section 80CCD(2) in BOTH old and new regimes. This is a powerful benefit that works in your favour regardless of which regime you choose.

The verdict is clear for most salaried employees at the ₹15 lakh income level: the new tax regime saves approximately ₹1,69,000 to ₹1,76,000 per year in tax (before and after cess), translating to over ₹14,000 more per month in your pocket. Unless your combined deduction claims are very high (active home loan + HRA + full 80C + NPS), switching to the new regime is an immediate financial upgrade for FY 2025-26.