Income Tax on 12 Lakh Salary

How ₹12,00,000 is taxed under the new regime

For a salaried taxpayer earning ₹12,00,000 a year, the ₹75,000 standard deduction brings taxable income to ₹11,25,000. Since that's at or below the ₹12,00,000 rebate threshold, the Section 87A rebate reduces the computed slab tax of ₹52,500 straight to zero — the taxpayer owes nothing.

After 4% Health & Education Cess, the final new-regime tax payable is ₹0.

The old regime comparison

Under the old regime, the same ₹12,00,000 salary (₹50,000 standard deduction, no other itemized deductions claimed) results in taxable income of ₹11,50,000 and a total tax payable of ₹1,63,800.

The two regimes break even once old-regime deductions (beyond the standard deduction) reach roughly ₹7,00,000 — below that level the new regime wins; above it, the old regime does.

What this means month to month

Spread across twelve months, the new-regime figure of ₹0 works out to roughly ₹0 a month in tax deducted at source, against ₹13,650 a month under the old regime with only the standard deduction claimed. An employer's TDS calculation should track whichever regime the employee has actually declared for the year — a mismatch between the declared regime and the one actually used at filing time is a common, avoidable reconciliation headache come return season.