How much tax do I pay on a ₹20 lakh salary?
On a ₹20,00,000 gross salary in FY 2026-27 the new regime costs ₹1,92,400 — taxable income of ₹19,25,000 after the ₹75,000 standard deduction, ₹1,85,000 of slab tax plus ₹7,400 of cess. The old regime costs ₹4,13,400 with nothing claimed, and needs roughly ₹7,10,000 of deductions before the two draw level.
Educational information, not investment advice · Muktify is not SEBI-registered
Old vs New Tax Regime Calculator (FY 2026-27)
Enter your salary and the deductions you already have — see which regime taxes you less.
CTC minus employer PF/gratuity — your gross taxable salary
EPF + PPF + ELSS + life insurance etc. (capped at ₹1.5L)
Self + family, capped at ₹25,000
Interest paid per year, capped at ₹2L in the old regime
Your eligible HRA exemption, if you rent (enter your computed amount)
New regime
₹97,500
tax per year, incl. 4% cess
Old regime
₹2.57L
tax per year, incl. 4% cess
You save ₹1.60L/year with the new regime.
Taxable income: ₹14.25L (new) · ₹14.50L (old, after your deductions)
Assumptions
- FY 2026-27 slabs; resident individual below 60, salaried.
- Standard deduction: ₹75,000 (new) / ₹50,000 (old). 4% cess included.
- Section 87A rebate applied in both regimes (incl. marginal relief in the new regime).
- Surcharge is not modelled — results above ₹50L income are underestimated.
- 80C is what you already invest — this tool never suggests investing more.
Educational estimate on your inputs — not tax advice. Verify with a tax professional before filing.
Not investment advice. Not SEBI-registered.
See all of this on your own numbers
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See how long your money would last →New regime, slab by slab
Start with ₹20,00,000 gross and subtract the ₹75,000 standard deduction, leaving taxable income of ₹19,25,000. The FY 2026-27 new-regime slabs then apply in steps: nothing on the first ₹4,00,000; 5% on the next ₹4,00,000 (₹20,000); 10% on the next ₹4,00,000 (₹40,000); 15% on the next ₹4,00,000 (₹60,000); and 20% on the remaining ₹3,25,000 up to ₹19,25,000 (₹65,000).
That totals ₹1,85,000 of slab tax. Health and Education Cess at 4% adds ₹7,400, giving ₹1,92,400 payable — an effective rate of about 9.6% on gross salary. The Section 87A rebate does not reach this far: it stops at ₹12,00,000 of taxable income, and marginal relief runs out shortly after.
₹0 + ₹20,000 + ₹40,000 + ₹60,000 + ₹65,000 = ₹1,85,000 → +4% cess = ₹1,92,400
Old regime, and how far behind it starts
Under the old regime the standard deduction is ₹50,000, so taxable income is ₹19,50,000 if you claim nothing else. The four slabs — nil to ₹2,50,000, 5% to ₹5,00,000, 20% to ₹10,00,000, then 30% — produce ₹3,97,500 of slab tax, and with cess the total is ₹4,13,400. That is ₹2,21,000 more than the new regime.
Deductions close the gap, and it takes a lot of them. A full ₹1,50,000 of 80C brings the old regime to ₹3,66,600 — still ₹1,74,200 behind. Adding ₹25,000 of 80D, ₹2,00,000 of home-loan interest and ₹2,40,000 of HRA exemption on top, which is ₹6,15,000 of deductions in all, gets it to ₹2,21,520: closer, and still ₹29,120 worse than doing nothing under the new regime.
The break-even sits near ₹7.1 lakh of deductions
Keep stacking and the two regimes meet at roughly ₹7,10,000 of total deductions, where the old regime costs ₹1,91,880 against the new regime’s ₹1,92,400. Past that point the old regime is cheaper; short of it, it is not.
That figure is the useful one to carry around, because it is checkable against your own life rather than against a rule of thumb. Add up what you actually claim — 80C, 80D, HRA exemption, home-loan interest, the ₹50,000 standard deduction — and see which side of ₹7.1 lakh it lands on. A deduction you intend to arrange is not the same as one you have.
What changes the answer
Two things move it most. The first is your salary structure rather than its total: a larger basic and DA raises both the HRA exemption you can reach and the employer-NPS contribution under 80CCD(2), which is deductible in both regimes. The second is where you live, since the HRA exemption turns on rent paid and on whether the city counts as a metro for this rule.
These figures assume a resident individual below 60 with salary income only. They exclude surcharge (which starts above ₹50,00,000), capital gains, business income, more than one house property, and the senior-citizen slabs. They also leave out the old-regime reliefs this model does not compute, all of which would lower the old-regime side.
Frequently asked questions
How much tax on a ₹20 lakh salary in FY 2026-27?
₹1,92,400 under the new regime — ₹1,85,000 of slab tax on taxable income of ₹19,25,000, plus ₹7,400 of 4% cess. Under the old regime it is ₹4,13,400 with nothing claimed.
Which regime is cheaper on a ₹20 lakh salary?
The new regime, unless your old-regime deductions add up to roughly ₹7,10,000 or more. Below that the new regime costs less; above it the old regime does. The comparison above shows where your own total lands.
How much tax will I pay monthly on ₹20 lakh a year?
Around ₹16,033 a month under the new regime, if the ₹1,92,400 annual figure is spread evenly. Your employer deducts it as TDS each month, so the actual monthly amount depends on the declarations you file with them.
What is the in-hand salary on a ₹20 lakh package?
Tax is only one part of the gap. In-hand pay also depends on your provident-fund contribution, professional tax, and whether the employer’s provident fund sits inside the package — the guide on a ₹20 LPA package works all of it through.
Does the ₹12 lakh nil-tax rule help at ₹20 lakh?
No. The full Section 87A rebate applies only up to ₹12,00,000 of taxable income, and the marginal relief just above it has run out well before ₹19,25,000, so the full slab tax applies.
Related
- How much tax do I pay on a ₹15 lakh salary? →
- Old vs new tax regime — which is better for me? →
- What is the in-hand salary for a ₹20 LPA package? →
- Old vs new regime calculator →
Last updated 2026-09-16. Figures reflect FY 2026-27 and are educational estimates, not advice. Muktify is not SEBI-registered and never recommends or ranks any instrument.
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