If you’re earning a salary of ₹10 lakh and have long-term capital gains (LTCG) of ₹3 lakh, your tax liability in FY 2025-26 may be higher than expected. With the updated income tax slabs, standard deductions, and changes in capital gains taxation, understanding your total tax outgo is crucial. This article breaks down the tax calculations under both new and old tax regimes, ensuring you make informed financial decisions. Additionally, we will discuss tax-saving strategies, investment options, and expert tips to minimize your tax burden effectively.
Understanding the Tax Regimes
1. New Tax Regime (FY 2025-26)
The new tax regime has a simplified structure with lower rates but removes several deductions. Here are the revised slabs:
- Up to ₹4,00,000 – No Tax
- ₹4,00,001 to ₹8,00,000 – 5%
- ₹8,00,001 to ₹12,00,000 – 10%
- ₹12,00,001 to ₹16,00,000 – 15%
- ₹16,00,001 to ₹20,00,000 – 20%
- ₹20,00,001 to ₹24,00,000 – 25%
- Above ₹24,00,000 – 30%
2. Old Tax Regime (FY 2025-26)
The old tax regime allows various deductions like 80C (PPF, ELSS, Life Insurance), 80D (Health Insurance), and HRA. The tax slabs are:
- Up to ₹2,50,000 – No Tax
- ₹2,50,001 to ₹5,00,000 – 5%
- ₹5,00,001 to ₹10,00,000 – 20%
- Above ₹10,00,000 – 30%
Detailed Tax Calculation
A. Salary Income Tax Calculation
Gross Salary: ₹10,00,000
Standard Deduction: ₹75,000 (New Regime) / ₹50,000 (Old Regime)
Net Taxable Salary: ₹9,25,000 (New Regime) / ₹9,50,000 (Old Regime)
Under the new regime, the tax is:
- Up to ₹4,00,000 – No Tax
- Next ₹4,00,000 @ 5% – ₹20,000
- Remaining ₹1,25,000 @ 10% – ₹12,500
- Total Income Tax on Salary = ₹32,500
B. Long-Term Capital Gains (LTCG) Tax Calculation
Total LTCG: ₹3,00,000
LTCG Exemption: ₹1,25,000
Taxable LTCG: ₹1,75,000
LTCG Tax (10%): ₹17,500
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C. Total Tax Payable
| Component | Tax Amount (₹) |
| Salary Tax (New Regime) | 32,500 |
| LTCG Tax | 17,500 |
| Total Tax Before Cess | 50,000 |
| Health & Education Cess (4%) | 2,000 |
| Total Tax Payable | 52,000 |
Tax-Saving Strategies
- Invest in 80C Options: PPF, ELSS, NPS, and Life Insurance to claim up to ₹1.5 lakh deduction.
- Claim 80D: Get tax benefits on health insurance premiums.
- Use Capital Gains Set-Off: Offset gains with capital losses to reduce tax.
- Invest in 54EC Bonds: Save tax on LTCG by investing in NHAI or REC bonds.
- Buy a House: Avail tax exemptions on capital gains under Section 54.
FAQs
1. Which tax regime is better for me?
If you claim deductions over ₹2.5 lakh, the old regime may be better. Otherwise, the new regime offers lower tax rates.
2. How to reduce tax on LTCG?
Invest in Section 54EC bonds, buy property under Section 54, or offset gains with capital loss carry-forward.
3. Do I need to pay advance tax?
Yes, if your total tax liability exceeds ₹10,000, pay advance tax quarterly to avoid penalties.
4. Can I switch tax regimes every year?
Yes, salaried individuals can choose annually, while business owners must decide once and stick to it.
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