With the revised income tax slabs for FY 2025-26, individuals earning an annual salary of ₹14.65 lakh can effectively reduce their tax liability to zero through strategic financial planning. By optimizing components such as the standard deduction, and employer contributions to the National Pension System (NPS) and Employees’ Provident Fund (EPF), the taxable income can be brought below the ₹12 lakh threshold, which is exempt from tax under the new regime.
Breakdown of Taxable Income Reduction:
- Gross Annual Salary: ₹14,65,000
- Standard Deduction: ₹75,000
- Employer’s EPF Contribution (12% of Basic Salary): ₹87,900
- Employer’s NPS Contribution (14% of Basic Salary): ₹1,02,550
After applying these deductions, the net taxable income amounts to ₹11,99,550, which falls below the ₹12 lakh exemption limit, resulting in zero tax liability. It’s essential for employees to ensure that their salary structure includes these components to fully benefit from the available deductions under the new tax regime.
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