Tax Summary at a Glance
| Parameter | New Regime | Old Regime |
|---|---|---|
| Gross Income | Rs.8,00,000 | Rs.8,00,000 |
| Standard Deduction | Rs.75,000 | Rs.50,000 |
| Section 80C Deductions | Not Available | Rs.1,50,000 |
| HRA Exemption (estimated) | Not Available | Rs.64,000 |
| Taxable Income | Rs.7,25,000 | Rs.5,36,000 |
| Total Tax (incl. cess) | Rs.0 | Rs.20,488 |
| Effective Tax Rate | 0.0% | 2.6% |
New regime is better at 8 LPA: Rs.0 tax with Section 87A rebate (saves Rs.20,488 vs old regime)
New Regime: Slab-Wise Tax Calculation
Standard deduction of Rs.75,000. Taxable income: Rs.7,25,000
| Income Slab | Rate | Taxable Amount | Tax |
|---|---|---|---|
| 0-4 Lakh | 0% | Rs.4,00,000 | Rs.0 |
| 4-8 Lakh | 5% | Rs.3,25,000 | Rs.16,250 |
| 8-12 Lakh | 10% | Rs.0 | Rs.0 |
| 12-16 Lakh | 15% | Rs.0 | Rs.0 |
| 16-20 Lakh | 20% | Rs.0 | Rs.0 |
| 20-24 Lakh | 25% | Rs.0 | Rs.0 |
| Above 24 Lakh | 30% | Rs.0 | Rs.0 |
Rebate u/s 87A applied: Since taxable income is Rs.12 lakh or below, full tax rebate applies. Net tax = Rs.0.
Calculate Your Exact Tax Liability
Your tax depends on your specific deductions and investments. Use our calculator to compare both regimes for your exact situation.
Use Tax CalculatorFrequently Asked Questions
How much tax do I pay on 8 LPA salary?
Under the new regime, tax on 8 LPA is Rs.0, thanks to Section 87A rebate (taxable income Rs.7,25,000 is below Rs.12 lakh threshold). Old regime: Rs.20,488.
Which tax regime is better at 8 LPA?
New regime is clearly better at 8 LPA — you pay Rs.0 tax thanks to Section 87A rebate, versus Rs.20,488 under old regime. The new regime saves you Rs.20,488 annually.
What is the effective tax rate at 8 LPA?
The effective tax rate (tax as percentage of gross income) is 0.0% under new regime and 2.6% under old regime (with deductions). This is much lower than the marginal slab rate because of deductions and lower slabs on initial income.
Can I switch between tax regimes every year?
Yes, salaried individuals can choose between old and new regime every financial year. You can inform your employer about your choice at the beginning of the year for TDS purposes, and finalize when filing your return.