₹12,75,000 salary, zero tax. The figure broke Indian personal-finance Twitter in 2025 and still confuses declarations in 2026: under the new regime, 87A rebate plus standard deduction can zero out tax near ₹12.75L for eligible salaried — while the old regime with full 80C/HRA/home-loan deductions wins bigger for others. Picking blind costs tens of thousands yearly. This guide runs both regimes on real salaries, explains 115BAC slabs, 87A mechanics and marginal relief, and tells you exactly when to switch.
Part of the India wealth & tax guide. Model your salary in the income tax calculator; check take-home in in-hand salary.
FY 2026-27 slabs: 115BAC, 87A, standard deduction
| New regime element | What it does | Watch out |
|---|---|---|
| 115BAC slabs | Graduated rates, no/few deductions | Slab creep as pay rises |
| 87A rebate | Zeroes tax up to the threshold | Cliff edge + marginal relief zone |
| Standard deduction | Flat cut for salaried | Applies in both regimes |
| 4% cess | On computed tax | Forgotten in hand math |
Verify each element against the current Finance Act before declaring — slabs and rebate limits move, and this page refreshes yearly. The calculator encodes FY 2026-27 as known in October 2026.
Crossover: three salaries, both regimes
| Profile | New regime ≈ | Old regime ≈ | Winner |
|---|---|---|---|
| ₹8L, minimal deductions | Near-zero (87A) | Higher | New, clearly |
| ₹15L, ₹3L deductions | Moderate | Lower | Old, usually |
| ₹25L, ₹5L+ deductions | High | Lower | Old, clearly |
Pattern: low deductions favor new, heavy 80C/HRA/home-loan stacks favor old. The ₹12–13L band is the knife-edge — marginal relief softens the cliff, but a small raise can still cost disproportionately. Run your exact CTC in the calculator with both regimes side by side; the crossover is personal, not universal.
Declaration discipline + in-hand reality
Employers need your regime choice early in the cycle — declare late and TDS defaults may over-withhold for months (recoverable at filing, painful meanwhile). Track HRA receipts, 80C proofs and home-loan certificates through the year; April scrambles lose deductions. Then convert CTC to monthly reality in the in-hand salary tool (PF, gratuity accounting, professional tax) — annual tax means little until it becomes monthly cash. Salaried with ESOPs, rent-free housing or foreign income: your edge cases need a CA, not a blog post.
Informational purposes only — not tax advice. Slabs, rebates and thresholds change yearly; verify current law and consult a qualified professional. See /terms.