Based on the new tax rates from the 2025 Indian Budget, here’s a simple guide to calculate your income tax if your annual income is Rs 10 lakh.
New Tax Rates for FY 2025-26
| Annual Income | Tax Rate |
|---|---|
| Rs 0 – 4 lakh | NIL |
| Rs 4 – 8 lakh | 5% |
| Rs 8 – 12 lakh | 10% |
| Rs 12 – 16 lakh | 15% |
| Rs 16 – 20 lakh | 20% |
| Rs 20 – 24 lakh | 25% |
| Above Rs 24 lakh | 30% |
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Income up to Rs 4 lakh: No tax
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Income from Rs 4 lakh to Rs 8 lakh: 5% of Rs 4 lakh = Rs 20,000
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Income from Rs 8 lakh to Rs 10 lakh: 10% of Rs 2 lakh = Rs 20,000
Total Tax Payable: Rs 20,000 (from slab 2) + Rs 20,000 (from slab 3) = Rs 40,000
So, if your annual income is Rs 10 lakh, your total tax payable is Rs 40,000 under the new tax rates.
Including Deductions (Optional)
If you have common deductions such as:
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Section 80C: Up to Rs 1.5 lakh for investments (like PPF, NSC, ELSS)
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Section 80D: Up to Rs 25,000 for health insurance premiums
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House Rent Allowance (HRA)
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Medical Allowance
Let’s assume:
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Rs 1.5 lakh under 80C
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Rs 25,000 under 80D
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Rs 15,000 HRA
Total Deductions: Rs 1.5 lakh + Rs 25,000 + Rs 15,000 = Rs 1.9 lakh
Taxable Income: Rs 10 lakh – Rs 1.9 lakh = Rs 8.1 lakh
Revised Tax Calculation:
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Income up to Rs 4 lakh: No tax
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Income from Rs 4 lakh to Rs 8 lakh: 5% of Rs 4 lakh = Rs 20,000
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Income from Rs 8 lakh to Rs 8.1 lakh: 10% of Rs 10,000 = Rs 1,000
Total Tax Payable after Deductions: Rs 20,000 (from slab 2) + Rs 1,000 (from slab 3) = Rs 21,000
So, if your annual income is Rs 10 lakh and you have deductions amounting to Rs 1.9 lakh, your total tax payable is Rs 21,000 under the new tax rates.
Key Points to Remember
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The tax is calculated by applying the tax rate to the income within each slab.
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Deductions can help reduce the taxable income, thereby lowering the tax liability.