Salary tax under the new regime is simpler than it looks, because almost nothing is deductible. Take your salary, subtract the ₹75,000 standard deduction, run the result through the slabs band by band, wipe the tax out with the Section 87A rebate if taxable income is ₹12,00,000 or less, and add 4% cess. That is the whole method — and below it is worked for a ₹15,00,000 salary and tabulated for ₹30,000 a month and for ₹8L, ₹12L, ₹15L, ₹20L and ₹25L a year.

The calculation in four steps

Salary tax under the new regime follows the same four steps at every income. Nothing else enters the calculation — no 80C, no HRA, no 80D. Work through them once and you can repeat the method for any salary.

Step 1 — Start with your gross annual salary. If you are paid monthly, multiply by 12. A salary of ₹30,000 a month is ₹3,60,000 a year.

Step 2 — Subtract the standard deduction of ₹75,000. Every salaried taxpayer gets this under the new regime. The result is your taxable income. For a ₹15,00,000 salary, taxable income is ₹14,25,000.

Step 3 — Apply the slabs band by band. Each band taxes only the rupees inside it: 0% up to ₹4,00,000, 5% from ₹4,00,000 to ₹8,00,000, 10% to ₹12,00,000, 15% to ₹16,00,000, 20% to ₹20,00,000, 25% to ₹24,00,000 and 30% above that. Never apply the top rate to the whole salary.

Step 4 — Apply the Section 87A rebate, then add 4% cess. If taxable income is ₹12,00,000 or less, the rebate wipes the tax to ₹0. Just above that limit, marginal relief caps the tax at the amount earned over ₹12,00,000. Otherwise, add the 4% health and education cess on top of the slab tax. That total is your annual tax.

Worked example: a ₹15,00,000 salary, step by step

Step 1: gross salary ₹15,00,000. Step 2: minus the ₹75,000 standard deduction gives taxable income of ₹14,25,000. Step 3: band by band — the first ₹4,00,000 at 0% is ₹0; the next ₹4,00,000 at 5% is ₹20,000; the next ₹4,00,000 at 10% is ₹40,000; the remaining ₹2,25,000 at 15% is ₹33,750. Slab tax: ₹20,000 + ₹40,000 + ₹33,750 = ₹93,750. Step 4: taxable income is above ₹12,00,000, so no rebate; add 4% cess (₹3,750) for a total of ₹97,500 a year — about ₹8,125 a month.

The most common error is to tax the whole ₹14,25,000 at 15%. That would give ₹2,13,750 before cess — more than double the correct ₹93,750. Only ₹2,25,000 actually faces the 15% rate.

Salary examples: ₹30,000 a month and ₹8L to ₹25L a year

The same four steps, applied to the salaries people actually ask about. Totals include the 4% cess; monthly tax is the annual total divided by 12, which is roughly how TDS spreads it across the year.

Two rows surprise people. At ₹8,00,000 the slab tax before the rebate is ₹16,250 (5% of the ₹3,25,000 above ₹4,00,000) — and the rebate wipes it to ₹0. At ₹12,00,000 the slab tax before the rebate is ₹52,500 — also wiped to ₹0. That is why a ₹12,00,000 salary pays no new-regime tax at all, while a ₹15,00,000 salary pays ₹97,500: the rebate ends at ₹12,00,000 of taxable income, and above it the full band-by-band tax applies (softened only just above the limit by marginal relief).

How TDS on salary fits in

Your employer does not wait until year-end. It estimates your annual tax from your salary, divides it across the remaining months and deducts that amount (TDS) from each paycheck. That is why the “about per month” column above is a useful check against your payslip: if your monthly TDS is far from it, something differs — a different regime choice, extra income, or deductions your employer has accounted for.

TDS is a payment towards your final bill, not a second tax. In our income tax calculator, enter the total already paid — TDS plus any advance tax — under Advanced options and a line appears showing what is still to pay under each regime; a negative figure means a refund is due. The amount already paid does not change which regime wins, because the same payments count against both.

Common errors in salary tax calculations

Taxing the whole salary at the top rate. Only the slice inside each band pays that band’s rate. At ₹15,00,000 the top slice is ₹2,25,000 at 15%, not ₹15,00,000.

Forgetting the ₹75,000 standard deduction. Taxable income is salary minus ₹75,000, not the salary itself. Skipping it overstates tax by up to ₹22,500 at higher slabs.

Subtracting 80C, HRA or 80D. Those reduce tax only under the old regime. Under the new regime they change nothing — a calculation that subtracts them from a new-regime salary is an old-regime calculation wearing the wrong label.

Forgetting the 4% cess. The slab tax is not the final bill. At ₹20,00,000 the slab tax is ₹1,85,000 but the amount payable is ₹1,92,400.

Using old-regime slabs for a new-regime answer. The old regime taxes everything above ₹10,00,000 at 30%; the new regime reaches 30% only above ₹24,00,000. Mixing the two tables is the fastest way to a wrong answer.

Sources: Budget 2025 slab structure for AY 2026-27 (FY 2025-26) as published on CalcFolk’s AY 2026-27 calculator page; Slab, rebate, surcharge and cess figures as published on CalcFolk’s AY 2026-27 calculator page. This article is general information, not tax advice.