pay zero tax - Rightsofemployees.com

Pay zero tax: ₹0 Income Tax even on ₹19.20 lakh salary! See this ‘secret’ calculation of New Tax Regime

Jyoti — Mon, 26 May 2025 07:00:36 +0000

How to pay zero tax: Whenever we used to think of tax savings, we only remembered the Old Tax Regime, in which tax exemption was taken by claiming HRA, LTA, 80C. But now the government has made the New Tax Regime more friendly.

Especially from FY 2025–26, this regime will suit most taxpayers more. With the changed slab rates, standard deduction and now the salary structuring facility being provided by the companies, it is possible to pay ZERO tax even on a salary of up to ₹ 19,20,000. How? Let us now understand in detail.

How will ZERO TAX be implemented?

From FY 2025–26, the slabs of the New Tax Regime have been changed and along with that companies are now making the salary structure tax friendly. The result is that even if your annual salary is up to ₹19.20 lakh, you can pay ZERO TAX by making sensible deductions and structuring.

New Tax Regime- FY 2025–26 Slabs

Taxable Income (in ₹)	Tax Rate (%)
0 – 4,00,000	NIL
4,00,001 – 8,00,000	5%
8,00,001 – 12,00,000	10%
12,00,001 – 16,00,000	15%
16,00,001 – 20,00,000	20%
20,00,001 – 24,00,000	25%
> 24,00,000	30%

Keep in mind that under Section 87A, a tax exemption of ₹25,000 is available on taxable income up to ₹12 lakh, i.e. tax = ₹0

Real salary breakup of ₹19.20 lakh CTC

Suppose your company structures salaries like this.

Component	Amount (₹)	Calculation Basis
Basic Pay	₹9,60,000	Fixed @ 50%
Personal Allowance	₹4,72,320	Fixed component (excluding flexi parts)
Employer PF (Flat)**	₹21,600	₹1,800 × 12 (fixed min opted)
Gratuity	₹46,080	4.8% of basic = ₹9.6L × 4.8%
Variable Pay (5%)	₹96,000	5% of ₹19,20,000
Flexi/MPMC Components	₹6,23,600	Books, car, entertainment etc.
Total CTC	₹19,20,000

Step-by-step calculation of taxable income

1. Standard Deduction – ₹75,000

₹19,20,000 – ₹75,000 = ₹18,45,000

2. Employer NPS Contribution – ₹84,000

(14% of Basic as per rules)
₹18,45,000 – ₹84,000 = ₹17,61,000

3. Flexi Pay tax-free components – ₹6,23,600

Flexi Pay Category	Amount (₹)
Car/Conveyance	₹2,85,600
Books & Periodicals	₹1,08,000
Entertainment	₹2,40,000
Uniform	₹90,000
Total	₹6,23,600

₹17,61,000 – ₹6,23,600 = ₹11,37,400

4. Home Loan Interest + Rental Income Set-off – ₹2,60,000

If the house is a let-out:

Interest Deduction: ₹2,00,000
Rental Income Adjustment: ₹60,000

₹11,37,400 – ₹2,60,000 = ₹8,77,400

5. Other Deductions – ₹50,000

Let’s say:

Gift exemption, family pension, or other miscellaneous

₹8,77,400 – ₹50,000 = ₹8,27,400 (Final Taxable Income)

Now understand the calculation of tax

Slab	Income Range	Rate	Tax (₹)
NIL	₹0 – ₹4,00,000	0%	₹0
5%	₹4L – ₹8L	5%	₹20,000
10%	₹8L – ₹8.27L	10%	₹2,740
Total Tax Payable			₹22,740
Section 87A Rebate	≤ ₹12L income	–	₹22,740
Net Tax			₹0

What needs to be done for Zero Tax?

Correct structuring of Flexi Pay
Minimum PF (₹1,800/month)
Employer NPS Contribution
Home Loan Interest Benefit (with let-out)
Other Income Adjustment + ₹50K छूट

The combination of all these makes your salary of ₹19.20 lakh tax free. You can request your HR to prepare your salary structure with a Flexi Pay plan. You can also increase your in-hand salary by opting for a minimum Provident Fund.

The post Pay zero tax: ₹0 Income Tax even on ₹19.20 lakh salary! See this ‘secret’ calculation of New Tax Regime first appeared on Rightsofemployees.com.

Leave Encashment Exemption: These taxpayers will have to pay zero tax, the government has changed the rules

Pravesh Maurya — Thu, 27 Jul 2023 07:26:52 +0000

Income Tax Return Update: Before July 31, there has been news of work for lakhs of taxpayers. If you have not yet filed your Income Tax Return (ITR), do not worry. The government has exempted these taxpayers from tax. This time the government has given a lot of relief to the taxpayers in the budget. During the budget, Finance Minister Nirmala Sitharaman made several announcements for taxpayers. You can avoid paying tax next year according to these rules.

The government changed the tax rules

The new financial year has started from 1st April. The government has changed many rules related to tax for the new financial year. According to the rules, if you choose the new tax regime, then you can get many benefits. Your tax can be zero under the new rules. According to the new tax regime, no tax is to be paid on income up to Rs 7 lakh. If your annual income is Rs 7 lakh, then you do not have to pay any tax.

Can take advantage of standard deduction

On February 1, Finance Minister Nirmala Sitharaman had announced to give the benefit of standard deduction in the new income tax regime. Its purpose is to attract taxpayers towards the new tax regime. The government wants more and more taxpayers to use the new tax system instead of the old tax system. Now even in the new tax regime, salary class and pensioners will get the benefit of standard deduction of Rs 50,000.

Will get benefit here too

Employed people whose annual income is Rs 15.5 lakh or more will get a standard deduction of Rs 52,500 annually in the new tax regime. Earlier, no standard deduction was available in the new tax regime. Only people employed in the old tax regime used to get the benefit of standard deduction, but it will be available in the new tax regime as well.

Government increased leave encashment exemption

Private sector employees used to get Rs 3 lakh exemption under leave encashment but now it has been increased to Rs 25 lakh.

The post Leave Encashment Exemption: These taxpayers will have to pay zero tax, the government has changed the rules first appeared on Rightsofemployees.com.

Income Tax Big News: Tax of Re 1 will not have to be paid even on earning of 10 lakhs, Know full details

Pravesh Maurya — Mon, 09 Jan 2023 15:05:35 +0000

Income Tax: If your salary package is 10 lakh rupees and you pay a large part of your earnings in the form of tax, then be careful. Perhaps you would think that there is no way to save tax, in such a situation, if it is right to pay tax, then you are wrong. Not only this, even if your salary package is 10.5 lakh rupees, even then you will not have to pay 1 rupee as tax. Let’s know the complete maths…

On a salary of 10.5 lakhs, you fall in the slab of 30 percent tax. Because 30 percent income tax is liable on annual income above 10 lakhs.

This is the complete maths
1. If your salary is 10.5 lakh rupees, then first of all subtract 50 thousand given by the government as standard deduction. In this way your taxable income is now Rs 10 lakh.

2. Now you can claim Rs 1.5 lakh under 80C. In this, you can claim children’s tuition fee, PPF, LIC, EPF, Mutual Fund (ELSS), principal of home loan etc. In this way, your taxable income here has been reduced to Rs 8.5 lakh.

3. You have to invest 50 thousand under National Pension System (NPS) under 80CCD(1B) to make tax zero (0) on salary of 10.5 lakhs. In this way your taxable salary has come down to Rs 8 lakh.

4. Now under Section 24B of Income Tax, you can claim tax exemption on home loan interest of Rs 2 lakh. In this way, now your taxable income has come down to Rs 6 lakh.

5. Under Section 80D of Income Tax, you can claim a premium of 25 thousand rupees medical health insurance for your family (wife and children). Apart from this, senior citizens can claim 50 thousand for health insurance premium paid for parents. After claiming total health insurance premium of 75 thousand, your taxable income has come down to 5.25 lakhs.

6. Now you have to donate 25 thousand rupees to any organization or trust to bring your taxable income to 5 lakhs. You can claim it under Section 80G of Income Tax. On donating 25 thousand, your taxable income came down to Rs 5 lakh.

You will have to pay zero tax
, now your taxable income has been reduced to Rs 5 lakh. On the income of 2.5 to 5 lakh rupees, at the rate of 5 percent, your tax becomes Rs 12,500. But there is an exemption from the government on this. In this case your tax liability becomes zero.

The post Income Tax Big News: Tax of Re 1 will not have to be paid even on earning of 10 lakhs, Know full details first appeared on Rightsofemployees.com.