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Income Tax Slab for FY 2025-26

The finance minister announces a new tax regime yearly, and citizens await the changes. These alternates aim to simplify the tax system and provide better financial freedom to the taxpayers, falling under various income brackets. Nirmala Sitharaman introduced new income tax slabs for FY 2025-26. It relieved salaried employees and businesspeople. However, what is the exact difference between the old and new tax regime? Should you choose the new regime or pay according to the old one?

This blog discusses the changes in the income tax structure for 2025 and how it benefits different sectors and individuals of India.

New Tax Slab for Financial Year 2025-26

The restructured tax slab is as follows:

Income BracketTax Percentage
Up to NR 4 Lakh0%
INR 4 Lakh to 8 Lakh5%
INR 8 Lakh to 12 Lakh10%
INR 12 Lakh to 16 Lakh15%
INR 16 Lakh to 20 Lakh20%
INR 20 Lakh to 24 Lakh25%
Above INR 24 Lakh30%

The new tax regime opens up the opportunity for up to INR 1.14 Lakh per annum, reducing the burden on individuals. Additionally, the rebate for taxpayers has increased to INR 60,000. The revised structure assures that the individuals do not have to pay tax. This is valid for anyone with an income of up to INR 12,00,000.

Due to the standard deduction of up to INR 75,000, the tax liability for salaried employees earning up to INR 12.75 Lakh becomes zero.

What Does the New Tax Regime Include?

The new tax regime has brought about the following changes:

  • The same tax rate is applicable to every individual. This includes salaried, senior, and super senior citizens.
  • A tax rebate of up to INR 25,000 is applicable if the total income is up to INR 7 Lakh.
  • A standard deduction of INR 75,000 is allowed for employees.
  • The family pension deduction has reached INR 25,000.
  • The NPS deduction has moved up from 10% to 14%.
  • The surcharge rate has dropped from 37% to 25%.

How to Calculate Your Income Tax Under the New Tax Regime?

As a taxpayer, it is important to know how to calculate your income under the default tax regime.

Income SlabTax Rate and Calculation
Up to INR 3 lakhNil
INR 3 lakh – INR 7 lakh5% on income above INR 3 lakh
INR 7 lakh – INR 10 lakhINR 20,000 + 10% on income above INR 7 lakh
INR 10 lakh – INR 12 lakhINR 50,000 + 15% on income above INR 10 lakh
INR 12 lakh – INR 15 lakhINR 80,000 + 20% on income above INR 12 lakh
Above INR 15 lakhINR 1,40,000 + 30% on income above INR 15 lakh

How to Calculate Your Income Tax Under the Old Tax Regime?

If you want to choose the old tax regime, here is how you can calculate it:

  • For individuals less than 60 years
Income SlabTax Rate and Calculation
Up to INR 2.5 lakhNil
INR 2.5 lakh – INR 5 lakh5% on income
INR 5 lakh – INR 10 lakhINR 12,500 + 20% on income
INR 10 lakh and aboveINR 1,12,500 + 30% on income
  • For individuals between 60 and 80 years old
Income SlabTax Rate and Calculation
Up to INR 3 lakhNil
INR 3 lakh – INR 5 lakh5% on income
INR 5 lakh – INR 10 lakhINR 10,000 + 20% on income
INR 10 lakh and aboveINR 1,10,000 + 30% on income
  • For senior citizens
Income SlabTax Rate and Calculation
Up to INR 5 lakhNil
INR 5 lakh – INR 10 lakh20% of income
INR 10 lakh and aboveINR 1,00,000 + 30% on income

Modifications in Income Tax Structure 2025

A few changes are applicable, effective from 1st April. According to the 2025 Union Budget, there are amendments for the betterment of the taxpayers. These changes are adopted to simplify compliance and increase transparency.

This table provides you with a glimpse into the changes:

AmendmentMeaning
Section 87A RebateThe rebate has increased to INR 60,000 under Section 87A. This means anyone earning up to INR 12 Lakh doesn’t have to pay tax.
TDS ThresholdThere is a revision of the TDS limit:Interest on senior citizen deposits – INR 1 LakhRent Payment – INR 6 Lakh
TCS ChangesThere will be no Tax Collected at Source for overseas tour packages and foreign remittances.New TCS rates are introduced for certain high-value transactions.
Time Limit ExtensionTaxpayers have a longer time to file their taxes. The limit has been moved to four years so that individuals have sufficient time to rectify any issues.
IFSC BenefitsNew tax incentives have been introduced to promote the International Financial Services Centre in Gujarat.You will get a capital gain tax exemption on specific transactions.There will be a concession on the tax rate of specific financial services.
Tax Exemption for Startup CompaniesAny company incorporated between April 203 and March 2025 will get a 100% tax exemption on 3 years of profit.
Section 206AB and 206CCA RemovedEarlier, individuals who failed to file taxes on time faced increased TCS and TDS rates. Now, this penalty has been removed to ease the taxpayers’ burden.

Apart from the above-discussed changes, the new tax regime also provides –

Deduction to Partner’s Remuneration

  • ULIPs As Capital Gains
  • Elimination of Equalisation Levy
  • Ease of Rented Property Provision

Conclusion

The new tax regime offers multiple benefits to the taxpayers. However, some individuals might find the old regime to be financially favourable for them. Understanding the difference between the regimes helps ascertain your future investment decisions, such as a house loan. Consult Tata Capital experts if you want to learn about how the new tax regime affects your home loan interest and financial implications.

How Much Tax Can Be Saved by a Home Loan?

Owning a home is a great accomplishment, and the attention you directed to owning one will bring you happiness and a solid financial long term gain. While real estate prices are soaring, the government influences also promote house buying. Among the most important of those are home loan tax advantages that make owning a property more affordable.

But if you’re wondering how much tax can be saved by a home loan, this guide will help you dissect each element of tax deductions, eligibility and smart financial planning.

Investments Eligible For Deductions And Tax Saving Under Section 80C

You can claim up to ₹1.5 lakh annually under Section 80C for repaying the home loan principal. This also covers stamp duty and registration charges if paid in the same year.

Conditions:

The property shouldn’t be sold within five years of possession, and the loan must be from a recognised lender.

This deduction is one of the most frequently claimed by salaried taxpayers in India.

What Payments Qualify for Deduction Under Section 80D?

Section 80D of the Income Tax Act provides tax benefits on premiums paid for health insurance policies. This feature covers you, your family, and dependent parents. The age-specific deduction limits are as follows.

You can claim up to ₹25,000 each year for health insurance premiums paid towards the medical cover of your immediate family, including you, your partner, and financially dependent minors.

These deductions not only help reduce your taxable income but also encourage timely investment in health security.

What Payments Qualify for Deduction Under Section 24(b)?

It offers one of the key tax benefits on home loan interest payments.

If the house is self-occupied, a deduction of ₹2 lakh per annum is allowed on the interest portion of your EMI. For rented properties, there is no specific limit on the interest deduction; however, the total loss from house property that can be set off is capped at ₹2 lakh per year.

Key Criteria:

You can purchase or construct a residential property with the loan amount. Construction must be done within five years in order to be entitled to the full benefits. 

What Payments Qualify for Deduction Under Section 80EE 

An additional deduction for interest on a home loan up to ₹50,000 per FY shall be allowed to a new first-time home buyer. This benefit is offered in excess of the prevailing ₹2,00,000 limit available under Section 24 of the Income Tax Act.

Eligibility Requirements:

  • The home loan must not exceed ₹35 lakh.
  • The property’s value should be ₹50 lakh or less.
  • The loan should have been sanctioned between April 1, 2016, to March 31, 2017.

This is particularly helpful as they transition from renters to first-time homeowners.

What Payments Qualify for Deduction Under Section 80EEA?

Section 80EEA provides an enhanced tax benefit by allowing an extra deduction on interest paid on a loan taken for the purchase of an affordable house to the extent of ₹1.5 lakh.

To qualify:

  • The property’s stamp duty price must be ₹45 lakh or below.
  • The loan has to be approved on or after 1 April 2019 and on or before 31 March 2022.
  • You should not be claiming Section 80EE benefits simultaneously.

Example: How Much Tax an Be Saved by a Home Loan?

Let’s assume you’re a salaried professional in the 30% income tax slab. You have the following expenses over the span of a year:

ComponentSectionAmount (₹)Explanation
Principal RepaymentSection 80C1,50,000Deduction is available for repayment of the loan’s principal component up to the maximum 80C limit.
Interest On Home Loan (Basic)24(b)2,00,000Deduction of interest paid for self-occupied property.
Other Interest BenefitSection 80EE50,000For first-time homebuyers who are eligible within the specified loan amount and property value.

Total Deduction = ₹4 lakh

Tax Savings = ₹4,00,000 × 30% = ₹1.2 lakh/year

This is a sizeable chunk taken out of the salary, just for the sake of repaying the housing loan.

Does the New Tax Regime Impact Home Loan Benefits?

Yes. The new tax system, introduced in 2020, provides for lower income tax rates, but most exemptions, including home loans, have been withdrawn. So if you choose the new regime, you cannot claim:

  • Section 80C
  • Section 24(b)
  • Section 80EE or 80EEA

This could lower your overall tax savings. But salaried people can change regimes each year, so it’s worth running the numbers to see which regime benefits you more, given your circumstances.

Plan with the Help of a Tool Like Housing Loan EMI Calculator

Before you apply for a home loan, you should know what your monthly repayment obligation would be like. This will help you:

  • Select the correct loan amount
  • Do not overborrow
  • Plan your budget efficiently

Also, remember that small differences in home loan interest rates can cost you thousands over the loan tenure. Always compare options and plan ahead.

Tips to Maximise Your Tax Benefits

  • Don’t miss deadlines: File your ITR on time to claim all deductions.
  • Submit proofs: Provide the loan interest certificate to your employer during tax submission.
  • Utilise the full Section 80C limit: If the principal of your home loan is lower, add investments like PPF, ELSS, or life insurance to make use of the ₹1.5 lakh limit. 
  • Prepay carefully: Paying down principal early can boost your long-term savings.

Conclusion

A home loan isn’t just a financial liability—it’s also a powerful tool for tax savings. If you are eligible, you can save up to ₹4–5 lakh per year by making the most of all deductions available. 

The key is to prepare carefully, choose the right lender and have your documents in order. Whether you’re a first-time buyer or upgrading to a larger home, knowing how much tax can be saved by a home loan can change your financial outlook entirely.

Now you are ready to explore housing loan options. Download the Tata Capital App todayVisit Tata Capital to get started

Understanding the Impact of Interest Rate Changes on Your Loans

Interest rates are critical factors to assess before signing a loan agreement, as they can affect your overall financial situation and the length of time required to repay your loan.

A slight increase in interest rates might seem unimportant at first glance, but it can lead to considerable increases in your monthly payments and the total amount you’ll owe over the life of the loan. So, it is essential to understand the impacts of interest rates in order to make informed decisions about borrowing.

Want to know more about how interest rates influence your financial obligations? Then, keep reading as we dig into what interest rate changes mean for you and how the high interest rates on loans are harmful, so that you can borrow wisely in the future!

What are Interest Rates?

Interest rates are the percentage of the loan amount lenders charge borrowers to access their capital. They are influenced by market conditions and fluctuate on a regular basis due to various factors such as economic growth, inflation, and the RBI’s monetary policies. As a result, you can experience both positive and negative impacts on your loan.

For instance, when interest rates are low, it’s a good deal for you to grab loans with lower EMIs. It also makes handling payments much easier. But when rates are high, it can hit hard with huge EMIs that put a strain on your wallet.

Different Types of Interest Rates

There are two types of interest rates. They are:

1. Fixed interest rates

Choosing fixed interest rates for your loan offers peace of mind since the rate remains unchanged despite economic fluctuations. This stability provides benefits like predictable monthly payments and protection from market changes, allowing you to make long-term financial commitments, such as mortgages for your dream home or eco-friendly loans for electric vehicles.

2. Variable interest rates

Variable interest rates, or adjustable rates, fluctuate with market changes and are linked to a benchmark rate like the prime rate. If the interest rates increase, your payments can rise significantly, leading to potential financial strain. Conversely, if rates decline, you can enjoy lower payments and save money over the loan’s life. This type of rate requires careful consideration and is best if you are comfortable with uncertainty.

How Do Interest Rates Change Your Loans

Here’s how thefluctuation of a home finance rate of interest can affect your borrowing experience, right from how much your loans cost to how you plan your finances:

1. Total Cost of Borrowing

The first obvious impact of interest rate fluctuations is on the amount you’ll pay for your loan. Higher rates mean you’ll pay more interest, making repayment more expensive. Conversely, securing a lower rate reduces overall interest, benefiting your wallet.

2. Monthly Payments

Next, you can feel a huge impact on what you pay each month. When rates go up, your monthly payments get higher, and when they go down, they become more manageable. This can change the way you handle your budget and overall finances.

3. Loan Eligibility

Interest rates also have an impact on whether you can get a loan. Lenders usually look at your credit score and financial history to find out what interest rate you’ll get. For instance, if your credit scores are good, you can get a lower interest rate.

4. Loan Term

Finally, interest rate changes can affect how you pick a loan term. When rates are low, you might be able to go for a shorter term and still keep your monthly payments easy to manage. On the other hand, if the rates are higher, you might need to extend the loan term to make the payments more budget-friendly, but that means you’ll end up paying more interest in the long run.

To End

Interest rates play an important role in how much loans cost and how easy they are to afford. Knowing how interest rates work can help you figure out your loan payments better and help you make smarter money choices, in addition to saving on interest.

Now that you have understood the impact of interest rates on your loans, start planning your finances wisely. Choose Tata Capital as your loan partner for low interest rates and a smooth repayment journey. Visit the official website or download the app to achieve your dreams!

How to Save Tax for Salary Above 20 Lakhs?

The ever-shifting nature of India’s tax regime can make it challenging to keep up with all the changes and make tax filing an overwhelming and confusing task. It can make it harder to keep track of all the ways in which you can maximise your tax savings.

If you earn an annual salary above Rs. 20 lakhs, careful analysis of the old and new tax regimes and smart tax planning will help you cut down on payable tax and save money.

This article will explore how to save tax for salary above Rs. 20 lakhs so that you can get the most out of your hard-earned income.

Budget 2025: Key Updates 

The new tax regime introduced in the 2025-26 Union Budget has brought some key changes to income tax rates and deductions.

Specifically, it has lowered the income tax rates for Rs. 20 lakh salary bracket, bringing much-needed financial relief to citizens in this tax bracket.

The following table illustrates the updated income tax rates for the fiscal year 2025-26 according to the new tax regime:

Total income in rupeesRate of tax
Up to 4 lakhs0%
4 to 8 lakhs5%
8 to 12 lakhs10%
12 to 16 lakhs15%
16 to 20 lakhs 20%
20 to 24 lakhs25%
Over 24 lakhs30%

Tax Slab Comparison: Old vs New Tax Regime

While the new tax regime offers lower tax rates, you can still opt for the old tax regime if the deductions and exemptions claimed under it help you save more tax on Rs. 20 lakhs salary.

Here is a comparison of the tax rates according to the old vs new tax regimes:

Total income in rupeesTax rate in the old regimeTax rate in the new regime (2025)
Up to Rs. 2.5 lakhs0%0%
Rs. 2.5 lakhs – Rs. 4 lakhs5%0%
Rs. 4 lakhs – Rs. 8 lakhs5%5%
Rs. 8 lakhs – Rs. 12 lakhs20%10%
Rs. 12 lakhs – Rs. 16 lakhs30%15%
Rs. 16 lakhs – Rs. 20 lakhs30%20%
Rs. 20 lakhs – Rs. 24 lakhs30%25%
Over Rs. 24 lakhs30%30%

How to Save Tax For on Rs. 20 Lakhs Salary

If you have an annual income of Rs. 20 lakhs or more, you can use the following tips to maximize your tax savings:

1. Utilise tax deductions under Section 80C to their fullest extent. Section 80C allows deductions up to Rs. 1.5 lakhs for taxpayers who have certain tax-saving investments and expenses, such as National Savings Certificate (NSC), Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF), and Employee Provident Fund (EPF).

2. Invest in health insurance policies to avail tax deductions under Section 80D. Section 80D can reduce your tax liability by up to Rs. 25,000. For senior citizens (people aged 60 or above), this amount has been increased to Rs. 50,000.

3. If you live on rent exceeding 10% of your basic salary, you can avail of the House Rent Allowance (HRA) tax exemption.

4. Under Section 24, you can avail of a tax deduction of up to two lakh rupees on the interest paid on a home loan on any rental income.

5. Under Section 80CCD(1B), you can qualify for tax deductions up to Rs. 1.5 lakhs by investing in the National Pension Scheme.

6. Under Section 80C, you can claim tax deductions on any expenses towards your professional development, including courses and training programs you’ve taken in your line of work.

7. Section 80E allows you to claim deductions up to Rs. 1.5 lakhs on education loans that you take out for yourself or your dependents for a maximum period of eight years.

8. Your employer may provide you with a Leave Travel Allowance (LTA) for travel expenses incurred while you are on leave. Tax exemptions on LTA can be claimed twice in four financial years.

9. Under Section 80G, you can claim a tax deduction on donations to registered charitable organisations, including religious and political organisations.

Wrapping Up

Careful tax planning and complete analysis of your salary according to the old vs. new tax regime can help you determine how to save tax on salary income of Rs. 20 lakhs. 

Learn how to plan your taxes the smart way with Tata Capital’s handy guide on tax on Rs. 15 lakhs income, and invest your extra savings in Tata Capital’s flexible personal loans at attractive interest rates. 

Tata Capital’s convenient home loan with minimal documentation and digital application process will set you on the path to homeownership today.

To learn more, check the Tata Capital website or download the app.

What is E-KYC?

The digital age has modernised many vital services we use daily, upgrading them to be faster and more cost-effective. Among these is e-KYC, or Electronic Know Your Customer.

E-KYC is the digital version of the Know Your Customer (KYC) process used in financial institutions. This highly secure and efficient process lets you verify your identity for financial transactions using your Aadhar number.

This article will explore eKYC meaning, types, and application process.

What is eKYC?

The e KYC full form is Electronic Know Your Customer. It is a digital service that verifies your identity via Aadhar authentication.

The e-KYC mechanism is provided by the Unique Identification Authority of India (UIDAI) and allows instant verification of the Aadhar number holder’s identity. It is the modern, paperless version of the Know Your Customer protocol mandated for all financial institutions by the RBI (Reserve Bank of India).

Since e-KYC is a paperless process, it significantly reduces the costs associated with the traditional Know Your Customer process.

Benefits of e-KYC

E-KYC provides several benefits, including:

1. E-KYC is cost-effective as it lets you avail identity verification and authentication processes without charging fees.

2. E-KYC provides immediate results in just a few minutes due to its digital and paperless nature.

3. The e-KYC ensures easy and secure authorisation. Your UIDAI information is provided to the relevant parties only after you give approval through secure methods like OTP or biometric verification.

4. E-KYC reduces the risks of document forgery due to its secure digital procedures and authentication requirements.

Types of e-KYC

There are several types of e-KYC methods used in India to verify a person’s or organization’s identity. These e-KYC types include:

1. OTP-based e-KYC: In this method, you provide your Aadhar number to get an OTP to your registered mobile number. You then use this OTP to complete the verification process. OTP-based e-KYC is the most convenient type for most people as it requires no biometric data or physical interactions.

2. Biometric-based e-KYC: In this method, you provide your Aadhar number along with biometric data like fingerprints. The provided data is used for verification by matching it with the data stored in the UIDAI database. Biometric-based e-KYC ensures high security due to the unique biometric data requirements.

3. Offline e-KYC: This method is unique due to its offline nature. You download a digitally signed XML with your demographic details from the official UIDAI website. This XML file can then be provided wherever KYC is required. This method allows you to ensure your privacy without revealing your UID number.

Eligibility Criteria For e-KYC

If you are a resident Indian citizen with an Aadhar number, you automatically qualify for e-KYC and only have to complete the application process.

Additionally, Non-resident Indians and foreigners who have been living in India for 182 days in the twelve months before applying for Aadhar are also eligible for e-KYC.

Document Requirements For e-KYC

As e-KYC is an entirely digital and paperless mechanism, it requires no documentation. You only require your Aadhar number to get your KYC done online. You will be asked to upload a self-attested copy of your e-Aadhar to the KYC registration agency (KRA) of your choice. Any other document requirements will be mentioned on the KRA’s portal.

Additionally, you may have to provide a passport photograph to avail e-KYC services.

How to Apply For e-KYC

It is easy to apply for an e-KYC. Follow the steps given below for a hassle-free e-KYC registration process:

1. Visit any SEBI-licensed KRA’s official website (Know Your Customer Registration Agency).

2. Create your personal account by filling in the required details.

3. Provide your personal details, including your Aadhar number and registered mobile number.

4. Enter the provided OTP and complete the verification process.

5. Submit a self-attested copy of your Aadhar card.

6. Visit the KRA’s web portal and input your PAN number to keep up with your application status.

How to Check Your e-KYC Status

Follow the straightforward steps given below to check your e-KYC status:

1. Visit the official Central Depository Service Limited (CDSL) website.

2. Click on ‘Inquire Your KYC.’

3. Fill in the required details, including your PAN or Aadhar number.

4. Enter the provided captcha.

5. Click ‘Submit’.

After completing this process, your e-KYC verification status will appear. If your application is verified, your status will show as ‘Verified by NDML.’ Otherwise, your status will appear as ‘Pending’.

Wrapping Up

The fast, paperless, and secure services provided by e-KYC make it an invaluable mechanism for both customers and organisations. Understanding the meaning of eKYC will help you benefit from this modern and efficient way to easily verify your identity during financial transactions.

Start your journey towards realising your financial dreams today with Tata Capital’s flexible personal loans at attractive interest rates.

To learn more, check the Tata Capital website or download the app.

Income Tax on Rs. 15 Lakh Salary

The new tax season brings countless worries and questions, from figuring out the right tax regime to looking for the best tax-saving options. Safe to say, filing ITRs and navigating the tax regime can quickly overwhelm you.

The FY 2025-26 lets you choose between the old tax regime and the new one, allowing you to opt for the regime that benefits you most. While the old regime offers more deductions, the new regime provides lower tax slabs.

Choosing which regime to follow requires a detailed assessment of your income as well as the tax exemptions and deductions available to you.

This article will explore the updated 15 lakhs income tax rates and help you maximise your tax savings on a 15 lakhs salary.

Major Updates Under Budget 2025

The 2025-26 Union Budget has introduced some key changes to the tax regime, including modified tax slab rates and increased rebates.

The following table illustrates the updated income tax rates for the fiscal year 2025-26 according to the new tax regime:

Total income in rupeesRate of tax
Up to 4 lakhs0%
4 to 8 lakhs5%
8 to 12 lakhs10%
12 to 16 lakhs15%
16 to 20 lakhs20%
20 to 24 lakhs25%
Over 24 lakhs30%

These tax revisions significantly reduce the tax amount payable by individuals in the 15 lakhs tax slab by lowering the tax rate for that income bracket.

Here is a comparison of the tax rates according to the old vs new tax regimes:

Total income in rupeesTax rate in the old regimeTax rate in the new regime (2025)
Up to Rs. 2.5 lakhs0%0%
Rs. 2.5 lakhs – Rs. 4 lakhs5%0%
Rs. 4 lakhs – Rs. 8 lakhs5%5%
Rs. 8 lakhs – Rs. 12 lakhs20%10%
Rs. 12 lakhs – Rs. 16 lakhs30%15%
Rs. 16 lakhs – Rs. 20 lakhs30%20%
Rs. 20 lakhs – Rs. 24 lakhs30%25%
Over Rs. 24 lakhs30%30%

While the new tax regime introduces some much-needed financial relief for the people, you can still opt for the old tax regime if the deductions and exemptions claimed under it benefit you more.

Tax Exemptions and Deductions Under the New Tax Regime

The new tax regime offers valuable tax deductions that can help you reduce liabilities on 15 lakhs salary tax, including:

1. Rs. 50,000 flat deduction for salaried and pensioned individuals

2. Standard deduction up to Rs. 75,000 for salaried employees

3. Deductions up to Rs. 25,000 under Section 57(iia) (family pension received)

4. Deductions under Section 80CCD (2) (employer’s contribution to the National Pension Scheme)

5. Deduction under Section 80 CCH (investment in Agniveer Corpus)

6. Tax exemption on voluntary retirement under Section 10(10C), gratuity u/s 10(10), and Leave encashment u/s 10(10AA).

However, the deductions and exemptions offered by the new regime are limited compared to the old regime, with certain key deductions no longer available.

Some changes to tax deductions to keep in mind are:

1. Tax exemptions, such as House Rent Allowance (HRA) and Leave Travel Allowance (LTA), are no longer available.

2. Deductions under Section 80C, such as life insurance and PF contributions, have been removed.

3. Exemptions for transport and medical allowances are also unavailable.

Old vs New Tax Regime: Which is Better For Income Tax on 15 Lakhs?

Which tax regime one should opt for will vary from person to person, as the income tax for 15 lakhs can differ according to factors like investments and income type.

The best tax regime for you will depend on your applicable income bracket. You must carefully review the exemptions and deductions available to you under each regime. This process may also include a review of your income source and investments.

As a general rule, opt for the old tax regime if your income-saving investments are over Rs. 3,75,000. If your income-saving investments are less than that, the lower tax rates offered by the new tax regime might benefit you more.

Wrapping Up

Careful tax planning and thorough analysis of the old vs. new tax regime are key to maximising your tax savings on 15 lakhs income and cutting down on liabilities. Learn how to plan your taxes the smart way with Tata Capital’s guides on tax on 7 lakh income and tax on 12 lakhs income.

Start the journey towards your homeownership goals today with Tata Capital’s flexible home loan at attractive interest rates.

To learn more, check the Tata Capital website or download the app.

Income Tax on Rs. 12 Lakh Salary

Tax season is one of the most stressful times of the year for working citizens. Tax liabilities can quickly eat into your income and leave you with far less money for investments than you would like.

However, if you are in the 12 lakh tax slab, the new tax regime 2025 is cause for celebration, with some much-needed tax relief.

This article will explore the updated income tax on 12 lakhs income under the new regime and help you decide which tax regime, old or new, is best for you.

Key Updates for Budget 2025

The Union Budget for the fiscal year 2025-26 has introduced some key updates, including:

1. No income tax on 12 lakh salary or less due to increased rebate up to Rs. 60,000.

2. Modified tax slab rates for the fiscal year 2025-26 under the new tax regime:

Total income in rupeesRate of tax
Up to 4 lakhs0%
4 to 8 lakhs5%
8 to 12 lakhs10%
12 to 16 lakhs15%
16 to 20 lakhs20%
20 to 24 lakhs25%
Over 24 lakhs30%

Income Tax Slab Comparison: Old vs. New Tax Regime

The tax revisions introduced in the new tax regime significantly decrease tax burdens for individuals with income up to Rs. 12 lakhs, allowing them to enjoy zero income tax due to the increased rebate.

Rates for income tax on Rs. 12 lakhs to 24 lakhs annual income have also been lowered.

The following table illustrates the differences in income tax slabs between the old and new tax regimes:

Total income in rupeesTax rate in the old regimeTax rate in the new regime (2025)
Up to Rs. 2.5 lakhs0%0%
Rs. 2.5 lakhs – Rs. 4 lakhs5%0%
Rs. 4 lakhs – Rs. 8 lakhs5%5%
Rs. 8 lakhs – Rs. 12 lakhs20%10%
Rs. 12 lakhs – Rs. 16 lakhs30%15%
Rs. 16 lakhs – Rs. 20 lakhs30%20%
Rs. 20 lakhs – Rs. 24 lakhs30%25%
Over Rs. 24 lakhs30%30%

While the new tax regime has introduced financial relief for citizens, taxpayers still have the option to choose the old tax regime if they prefer the benefits particular to that regime instead.

Changes in Tax Deductions and Exemptions Under the New Tax Regime

The new tax regime offers limited deductions in comparison to the old regime:

1. Tax exemptions, such as House Rent Allowance (HRA) and Leave Travel Allowance (LTA), are no longer available.

2. Deductions under Section 80C, such as life insurance and PF contributions, have been removed.

3. Exemptions for transport and medical allowances are also unavailable.

However, there are still valuable saving opportunities provided by the new regime, including:

1. Rs. 50,000 flat deductions for salaried and pensioned individuals.

2. Deductions under Section 80CCD (2), like the employer’s contribution to the National Pension Scheme.

Old vs New Tax Regime: Which is Better For 12 Lakh Income Tax?

Which tax regime you should opt for will depend on the tax deductions available to you. If you are eligible for several tax deductions and exemptions, then the old tax regime will be optimal for you.

However, if you cannot claim significant deductions, the lower tax rates provided by the new tax regime will be more beneficial for you.

For an annual income of Rs. 12 lakhs, consider the following factors:

1. Salary income of Rs. 12 lakhs: Choose the old regime if your tax-saving investments are over Rs. 30,000. Otherwise, go for the new regime.

2. Non-salary income of Rs. 12 lakhs: Opt for the new regime if your tax-saving investments are less than Rs. 3,12,500. Otherwise, the old regime may be more beneficial for you.

Wrapping Up

The new tax regime 2025 offers much-needed tax relief for the common citizen. However, you may still find value in the old regime. Careful tax planning can help you maximize tax exemptions and boost your savings. Check out the Tata Capital blog to learn how to avail exemptions for tax on 7 lakh income.

Save money on your taxable income and achieve your homeownership goals with Tata Capital’s flexible home loan at attractive interest rates.

To learn more, check the Tata Capital website or download the app.

How to Save Tax for Salary Above 50 Lakhs?

If you’re earning above ₹50 lakh a year, it puts you in the highest tax bracket, which can mean you have to worry about the high tax payments that come with it. But that’s far from true.

With the right planning, you can significantly reduce your tax burden while staying fully compliant with the law. Keep reading to discover strategies on how to save taxes on a 50-lakh salary under the different tax regimes in India and maximise your savings.

What are the Different Tax Regimes in India?

Before we move on to strategies to save taxes, it’s important to understand the current tax regimes in India.

Under the Income Tax Act 1961, the government levies direct taxes on individual incomes. However, in 2020-21, a new tax regime was introduced with revised tax rates and methods, offering an alternative to the existing system.

So, currently, there are two tax regimes in India, old and new, under which you can file your income taxes.

How to Save Taxes Under the Old Tax Regime?

The old tax regime benefits high-income earners by offering multiple deductions and exemptions, significantly lowering the taxable income. Some of the deductions of the old tax regime under different sections of the Income Tax Act include:

1. Deductions under Section 80C if you invest in Public Provident Fund (PPF), National Savings Certificate (NSC), Employees Provident Fund (EPF), National Pension System (NPS), Equity Linked Savings Scheme (ELSS), Fixed Deposit of five years or more, and home loan repayment.

2. Deductions under Section 80D include premiums on health insurance of up to ₹ 25,000.

3. Deductions under Section 80E include the entire interest you pay on an education loan.

4. Deductions under Section 80G include the donations you make to charitable institutions.

5. Deductions under Section 80DD include the costs for the treatment of any disabled dependents.

6. A standard deduction of ₹ 50,000.

How to Save Taxes Under the New Tax Regime?

The new tax regime offers lower tax slab rates but fewer opportunities for exemptions and deductions. Some of the deductions are:

1. A standard deduction of ₹ 75,000.

2. Deductions on gratuity, voluntary retirement, and leave encashments.

3. Deductions on travel allowances for work purposes.

4. Deductions on family pension income.

5. Deductions on transport allowances incurred by disabled individuals.

How to Save Tax For a Salary Above 50 Lakhs?

Now that we have explored some of the tax-saving options available under different tax regimes, let’s dive into effective strategies to save tax on a 50-lakh salary or above.

1. Explore different tax-saving investment products

Invest in different investment products such as PPF, NPS, FDs, ELSS, EPF, NSC, etc. These instruments provide attractive tax benefits under Section 80C of the Income Tax Act, 1961.

2. Take life and health insurance

Investing in life insurance will allow you a deduction of ₹ 1.5 lakhs under Section 80C. On the other hand, purchasing health insurance for yourself and your loved ones can give you a tax benefit of ₹ 25,000 or even ₹ 50,000 if you are 60 or above.

3. Utilise your House Rent Allowance (HRA)

If you live in a rented house and get an HRA as a part of your salary, you can use your rent documents to claim HRA exemptions while filing for your income tax as per the prescribed limits.

4. Make a charitable donation

If you contribute to any relief funds or charitable organisations, you are eligible for tax benefits of up to 50% or 100% of the donations made. This donation should only be made in a cheque, demand draft, or cash, not in kind.

5. Leverage home loan benefits

You can even avail of tax deductions on your home loan interest payments of up to ₹ 2 lakhs and ₹ 5 lakhs on principal repayments.

6. Choose the right tax regime

Choosing the right tax regime is crucial for optimising your tax savings. While the old tax regime offers higher deductions to those who invest a lot, the new tax regime has lower tax rates and is beneficial for those who do not invest much.

The Bottom Line

Income taxes can sometimes feel like the greatest financial burden. But it doesn’t have to be like that. Whether you earn 50 lakhs or 15 lakhs, income tax strategies that involve exemptions, deductions, and strategic investments can not only minimise stress but also unlock significant savings opportunities.

If you are looking for reliable loan options, turn to Tata Capital, which offers attractive loan terms with flexible tenures and minimal documentation.

To learn more, visit the Tata Capital website or download the app today!

How to Save Tax for Salary Above 30 Lakhs?

A salary above Rs. 30 lakhs can help you enjoy financial stability and a sense of accomplishment. But it becomes trouble when it brings a significant tax burden, often eating into a large chunk of your earnings.

However, efficient tax planning with a salary above Rs. 30 lakhs can help you cut down on tax liabilities by utilising the new or old tax regime to your fullest benefit.

This article will explore how to save tax for salary above Rs. 30 lakhs so that you can maximise your tax savings and save more money.

Key Updates in Budget 2025

The Union Budget has introduced a new tax regime that has brought some key updates to income tax slabs and tax relief options, including:

1. Updated slab rates that lower the income tax rate for almost all income brackets.

2. Increase in standard deduction from Rs. 50,000 to Rs. 75,000.

3. Increase in family pension tax deduction from Rs. 15,000 to Rs. 25,000.

The following table illustrates the updated income tax rates for the fiscal year 2025-26 according to the new tax regime:

Total income in rupeesRate of tax
Up to 4 lakhs0%
4 to 8 lakhs5%
8 to 12 lakhs10%
12 to 16 lakhs15%
16 to 20 lakhs20%
20 to 24 lakhs25%
Over 24 lakhs30%

Old vs New Regime Tax Rate Comparison

The new tax regime is the default for taxpayers. However, you can still opt for the old tax regime if the deductions and exemptions claimed under it benefit you more in cutting down on tax liabilities.

The following table illustrates the difference in tax rates according to the old vs new tax regimes:

Total income in rupeesTax rate in the old regimeTax rate in the new regime (2025)
Up to Rs. 2.5 lakhs0%0%
Rs. 2.5 lakhs – Rs. 4 lakhs5%0%
Rs. 4 lakhs – Rs. 8 lakhs5%5%
Rs. 8 lakhs – Rs. 12 lakhs20%10%
Rs. 12 lakhs – Rs. 16 lakhs30%15%
Rs. 16 lakhs – Rs. 20 lakhs30%20%
Rs. 20 lakhs – Rs. 24 lakhs30%25%
Over Rs. 24 lakhs30%30%

While the income tax rate for salary above 30 lakhs is the same in the old and new regimes, you can use the exemptions and deductions you are eligible for to maximise tax savings.

How to Save Tax on Rs. 30 Lakhs Salary

If you earn Rs. 30 lakhs salary or more, you do not have to pay taxes on your total income. Your annual salary minus tax exemptions is your actual taxable salary income, while your taxable salary income minus tax deductions is your net taxable income.

After applying exemptions and deductions to your total salary, you only have to pay taxes on the amount left. Thus, maximising tax deductions and exemptions is key to saving tax on 30 lakh salary.

Best Ways to Save Tax on Rs. 30 Lakhs Salary

The following best practices can help you determine how to save tax on salary income of Rs. 30 lakhs:

1. Make full use of deduction under Section 80C by investing in tax-saving instruments such as the National Savings Certificate (NSC), Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF), and Employee Provident Fund (EPF).

2. Invest in health insurance premiums for yourself and your dependents to claim tax deductions up to Rs. 25,000 under Section 80D. Additionally, senior citizens, individuals over the age of 60, can claim deductions up to Rs. 50,000.

3. Under Section 80C, you can claim tax deductions up to Rs. 50,000 with Rs. 1.5 lakh deductions by contributing to the National Pension Scheme.

4. If your salary qualifies you for House Rent Allowance (HRA), you can use it to claim tax exemptions under Section 10(13A).

5. Under Section 24B, you can claim deductions on home loans up to Rs. 1.5 lakhs on the principal amount and up to two lakh rupees on the interest amount.

6. Under Section 80G, you can claim a tax deduction on donations to registered charitable organisations, including religious and political organisations.

7. Section 80E allows you to claim deductions up to Rs. 1.5 lakhs on education loans that you take out for yourself or your dependents for a maximum period of eight years.

Wrapping Up

Careful tax planning and complete analysis of your salary according to the old vs. new tax regime can help you determine how to save tax on salary income of Rs. 30 lakhs.

Plan your taxes smartly with Tata Capital’s easy-to-understand guide on 15 lakhs income tax, and invest the extra savings in Tata Capital’s flexible home loan to start making your homeownership dreams a reality.

Tata Capital’s instant personal loans at attractive interest rates and zero processing fee help you realise all your financial goals with minimum stress.

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What Is the Prime Lending Rate?

One of the biggest challenges when taking out a loan is the high interest rates charged by lending institutions. These interest rates can significantly increase the money you need to pay back and put an unfortunate dent in your finances.

However, if lenders view you as a trustworthy client with a high credit score and good financial profile, you can avail the loan at a better interest rate, known as the prime lending rate.

This article explores the prime lending rate meaning, the factors affecting it, and how it can affect the loans you borrow.

What is the Prime Lending Rate?

The Prime Lending Rate (PLR) is the interest rate lending institutions use as a base to determine the interest rate for their loan products. 

You can define prime interest rate as the lowest rate at which financial institutions lend money. It is used as a reference point to set interest rates for various variable-rate financial products such as mortgages and personal loans.

Changes in key policy rates by the Reserve Bank of India (RBI) influence the prime lending rate. 

Commercial financial institutions offer prime lending rates to their most creditworthy consumers on short-term loan products, including variable-rate personal and business loans.

Consumers who benefit from the prime lending rate include people who have:

1. High credit score,

2. Strong financial profile, and 

3. Low default risk.

Conversely, consumers with a low credit score or higher perceived risk may be charged a higher interest rate by lenders.

Key Factors Affecting Prime Lending Rate in India

Prime lending rates are set according to the RBI guidelines. The RBI sets the base rate below which no lending institution can set its prime rate. The prime rate for a particular financial institution is set by its management according to various factors such as funding costs and operating expenses.

Various other factors, such as market conditions, inflation rates, global economic conditions, and currency exchange rates can also impact the prime lending rate in India.

All these factors, in combination, determine the spread, which is the additional cost lenders consider in addition to the Repo Rate. The prime lending rate added to the spread determines the interest rate for consumers.

Loans Not Affected by Prime Lending Rate

Changes in the prime rate do not affect existing loans or lines of credit with fixed interest rates. This includes loans like student loans and mortgages, as well as credit cards issued with fixed rates.

How Prime Lending Rate Affects Personal Loan

The prime rate serves as a benchmark for lending rates, and it may affect personal loan interest rates. An increase in the prime lending rate may also increase personal loan interest rates, increasing the loan repayment amount.

Changes in the prime lending rate can thus affect the affordability and cost of borrowing these loans.

Difference Between Prime Lending Rate and Base Rate

The base rate, introduced in July 2010, is the minimum interest rate set by the RBI for giving out loans. RBI controls the base rate to enhance transparency, keep the economy in check, and ensure that consumers are not charged discriminately.

The following table illustrates the differences between prime lending rate and base rate:

FeaturesPrime lending rateBase rate
PurposeServes as a reference point for financial institutions to set interest rates on loans for their most creditworthy consumersServes as a benchmark for financial institutions to calculate interest rates for various loans
DeterminantInfluenced by changes in the RBI’s policy rates, credit risk, and market conditionsInfluenced by the RBI’s monetary policy, economic conditions, and cost of funds
FlexibilityTypically set by the lending institutions as a fixed percentage above the RBI’s policy rateLending institutions are allowed to add a spread to the base rate to calculate the actual lending rate
Used forPrimarily used for loans offered to the most creditworthy consumers Used for a wide range of loans, such as housing loans and MSME loans
CreditworthinessDirectly influences the interest costs of the most creditworthy consumers for loans with prime interest rateInfluences interest costs for loans with variable interest rates tied to the base rate
TransparencyProvides transparent benchmark for certain interest ratesIncreases transparency in lending rates and ensures fair pricing
Adjustment frequencyAdjusted by lending institutions in response to changes in market conditions and RBI’s policy ratesAdjusted by lending institutions according to changes in the economic conditions and the RBI’s policy rates 
RegulationRegulatory scrutiny ensures transparency and prevents discriminatory lending practices Regulatory oversight ensures fair lending practices and adherence to RBI guidelines
Risk considerationsConsiders the credit risk of lending funds to the most creditworthy consumersConsiders the overall economic risk and cost of funds for financial institutions

Wrapping Up

Understanding the meaning of prime interest rate can help you gain an edge in securing loans. With a good credit score and financial profile, you can get loans at better interest rates than the general populace and fulfil your financial dreams, like buying a new bike.

Finance your goals today with Tata Capital’s finance for two wheeler. Utilise our easy-to-use online Bike EMI calculator to calculate your potential monthly EMIs in advance.

To learn more, check the Tata Capital website or download the app.